Bankrate, a consumer financial services company, recently published a report revealing that the average American driver is allocating 3.41% of their income towards car insurance. The report was compiled by Shannon Martin, a licensed insurance agent with a decade and a half of industry experience.

According to the report, entitled "The true cost of auto insurance in 2024," it was found that the average cost of full coverage car insurance rose by 26% last year. This surge resulted in drivers paying an average of $2,543 in 2024 for full coverage. For minimum coverage, drivers are shelling out an average of $740 annually. In comparison, the average cost of full coverage auto insurance stood at $1,674 in 2021, signifying a staggering increase of 56% over the past three years.

Martin's report also highlighted several factors influencing car insurance costs. These include inflation and extreme weather conditions. The location where a driver resides also impacts insurance costs; insurers take into account risk factors such as population density and local medical care costs. Driving violations can lead to a hike in insurance costs as well; drivers in California and Michigan bear the brunt of severe financial penalties for infractions.

Furthermore, Martin stated that in most states, insurance providers consider a driver's credit score when determining insurance coverage costs. Consequently, drivers with lower credit scores are charged more. On average, drivers with poor credit pay $4,338 for full coverage insurance while those with excellent credit pay an average of $2,543 for identical coverage.

According to its website, Bankrate offers resources like comparison tools to assist consumers in making informed financial decisions. Over 100 million people utilize Bankrate's services each year. Established in 1976 under the name Bank Rate Monitor, the company has been serving consumers for decades.