Centris Insurance
Get cheap auto insurance quotes and save up to 40% today

Cheapest Car Insurance and Minimum Wages

13.jpg Car insurance is quite a budget constraint for a lot of American households, but when you are making minimum wage it tends to be a major issue.

More than half of the four million Americans who earn minimum wage are 24 or younger. This article will analyze the liability insurance costs for a 1997 Ford Taurus driven by a 24 year old male driver with no previous claims, a good driving record and a good FICO score. We have chosen this particular car because it’s cheap (priced at around $2,500 on the used car market) and popular (around 250,000 of them are to be seen on American roads).

Minimum wages in the United States

The Federal government imposes a minimum wage of at least $7.25 an hour. Wyoming and Georgia still pay $5.15 as of April 2012, and Arkansas follows with $6.25. On the higher end of the payment scale we have Washington with $8.67, Oregon with $8.50 and Connecticut, District of Columbia, Illinois and Nevada with $8.25.

Cheap and expensive states for minimum wage workers

If you earn minimum wage, more than half of a month’s income will go towards insuring your Taurus. One of the few exceptions we found is Iowa, where the average premium for the state minimum liability of 20/40/15 is of $410 per year and minimum wage is of $7.25 – you can pay for a year’s coverage after 57 hours of work. Here are some other cheap states:

  • Indiana: minimum liability limits of 25/50/10, average cost of $428, minimum wage of $7.25, resulting in 59 hours;
  • Missouri: minimum liability limits of 25/50/10, average cost of $480, minimum wage of $7.25, resulting in 66 hours;
  • Hawaii: minimum liability limits of 20/40/10, average cost of $492, minimum wage of $7.25, resulting in 68 hours.

New York is by far the most expensive state to insure your car. The minimum liability of 25/50/10 costs a whopping $1,544 on average and you will have to work for almost two months at a wage of $7.25/hour to pay for it. Other expensive states to insure your Ford Taurus are:

  • District of Columbia: minimum liability limits of 25/50/10, average cost of $1,422, minimum wage of $8.25, resulting in 172 hours;
  • New Jersey: minimum liability limits of 15/30/5, average cost of $1,230, minimum wage of $7.25, resulting in 170 hours;
  • Michigan: minimum liability limits of 20/40/10, average cost of $1,216, minimum wage of $7.40, resulting in 164 hours.

What you can do when costs exceed your budget

Long story short, you can’t do much about it. Gasoline is another consistent expense for a driver, but it can be somewhat controlled – you can walk, ride a bike, use public transportation or carpool. There isn’t, however, a way to split your insurance expenses. The best you can do is make sure they won’t go up:

  • Drive safely. First accident is usually forgiven, but from the second one your premium will go up.
  • Keep a good credit score. Insurers monitor your FICO rating and, as soon as it drops below a certain threshold, you will be billed more.
  • Shop around. Go online and compare car insurance rates. Prices vary from one insurer to another and, when you are on a shoestring budget, even a few dollars saved can make a difference.

Latest News

October 7th, 2014

Read our new auto insurance guides for California and Texas and save on your new renewal.

October 2nd, 2014

GAP insurance is essential for a new car. It covers the difference of what's paid vs car current market price. Read more here.

September 22nd, 2014

Ever wondered why men pay more for car insurance than women? Wonder no more, we have published an article on the subject.