What Car Insurance is Cheapest for First-time Drivers in Detroit?

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One of the many things that aid in calculating car insurance rates is where you keep your car. Areas with a lot of weather claims or more people tend to pay more, whereas areas with lower crime rates and fewer weather claims have the luxury of lower rates.

The following table ranks the highest-priced areas in Michigan for first-time drivers in which to purchase auto insurance. Detroit is ranked #1 with an annual premium of $4,960 for coverage, which is approximately $413 monthly.

How much is car insurance in Detroit?
Rank City Annual Premium
1 Detroit $4,960
2 Dearborn $4,123
3 Southfield $3,862
4 Pontiac $3,639
5 Flint $3,473
6 Warren $3,322
7 Dearborn Heights $3,207
8 Taylor $3,178
9 Sterling Heights $2,924
10 Westland $2,821
11 St. Clair Shores $2,792
12 Farmington Hills $2,786
13 Livonia $2,714
14 Saginaw $2,583
15 Troy $2,562
16 Rochester Hills $2,542
17 Royal Oak $2,487
18 Novi $2,464
19 Battle Creek $2,378
20 Lansing $2,367
21 Grand Rapids $2,275
22 Kentwood $2,273
23 Kalamazoo $2,192
24 Ann Arbor $2,149
25 Wyoming $2,130
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Rate quotes are estimated as vehicle location can raise or lower coverage rates greatly.

The car, truck, or SUV needing coverage is one of the primary factors when comparison shopping for the most economical coverage for first-time drivers. Vehicles with high performance, a lack of advanced safety features, or a high likelihood of having liability claims will cost more to insure than safer models.

The table below features car insurance prices for a number of the cheapest vehicles to insure in Michigan.

Cheapest Vehicles to Insure in Detroit, MI
Make, Model, and Trim Level Estimated Cost for Full Coverage
Ford Escape XLS 4WD $17,602
Honda CR-V EX-L 4WD $17,786
Hyundai Elantra SE Touring Station Wagon $18,934
Toyota Prius $19,123
Dodge Grand Caravan SE $19,735
Ford F-150 XLT Super Cab 4WD $19,923
Ford Focus SE 4-Dr Sedan $20,700
Toyota Tacoma Double Cab 4WD $20,883
Chevrolet Silverado LS Extended Cab 4WD $20,893
Toyota RAV4 Sport 2WD $20,883
Ford Explorer Eddie Bauer 4WD $21,072
Dodge Ram 3500 Crew Cab Laramie 2WD $21,080
Honda Odyssey EX-L W/Navigation $22,032
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Data variables include single male driver age 17, no speeding tickets, no at-fault accidents, $1,000 deductibles, and Michigan minimum liability limits. Discounts applied include claim-free, and safe-driver. Premium costs do not factor in the specific area where the vehicle is garaged which can affect prices significantly.

Based upon the rates shown, we can conclude that vehicles like the Ford Escape, Honda CR-V, Hyundai Elantra, Toyota Prius, and Dodge Grand Caravan are most likely going to be some of the most budget-friendly vehicles to insure for new drivers. Rates will tend to be higher just because there is more exposure for first-time drivers, but in general those specific models will probably have the cheapest rates compared to other types of vehicles.

Do you need full coverage?

Reducing premiums for auto insurance should be important to the majority of vehicle owners, and a good way to pay lower rates for insurance for first-time drivers is to only pay for liability coverage. The chart below shows the difference between premium costs when comparing full coverage to liability only. The premiums assume a clean driving record, no claims, $1,000 deductibles, single marital status, and no other discounts are factored in.

Averaged for all age groups, physical damage coverage on your policy costs $3,841 per year over and above liability coverage. That is a large expense and it proposes the question if it's a good idea to buy full coverage. There is no definitive formula that is best for determining when to drop physical damage insurance, but there is a guideline you can use. If the annual cost of comprehensive and collision coverage is more than about 10% of any settlement you would receive from your insurance company, the it may be a good time to stop paying for full coverage.

For example, let's say your vehicle's replacement value is $8,500 and you have $1,000 physical damage deductibles. If your vehicle is totaled, you would only receive $7,500 after paying your policy deductible. If it's costing in excess of $750 annually for comprehensive and collision coverage, then it might be time to consider dropping full coverage.

There are some scenarios where buying only liability insurance is not financially feasible. If you still have a loan on your vehicle, you have to carry full coverage to protect the lienholder's interest in the vehicle. Also, if you don't have enough money to buy a different vehicle in the event your current vehicle is totaled, you should not consider dropping full coverage.

Selecting the best insurer can be difficult considering how many different companies there are to choose from in Michigan. The company rank data shown next could help you select which car insurance providers to look at when comparing rate quotes. These rankings are for insurance companies that insure vehicles in the majority of U.S. states, so companies with more of a regional focus will not be included in this list.

Top 10 Major Auto Insurers in Detroit Ranked by Customer Satisfaction

  1. The Hartford - 93%
  2. Progressive - 90%
  3. 21st Century - 89%
  4. USAA - 87%
  5. State Farm - 87%
  6. Safeco Insurance - 86%
  7. AAA Insurance - 86%
  8. Farmers Insurance - 85%
  9. GEICO - 85%
  10. American Family - 85%

Top 10 Major Auto Insurers in Detroit Ranked by A.M. Best Rating

  1. State Farm - A++
  2. USAA - A++
  3. GEICO - A++
  4. The Hartford - A+
  5. Allstate - A+
  6. Nationwide - A+
  7. Esurance - A+
  8. Progressive - A+
  9. Safeco Insurance - A
  10. Liberty Mutual - A

Impact of careless driving on Detroit auto insurance rates

The easiest method to find cheap auto insurance prices in Detroit for new drivers is to drive carefully and avoid traffic citations and accidents. The chart below shows how speeding tickets and accident claims can drive up auto insurance costs for each age group. The prices are based on a single male driver, comprehensive and collision coverage, $250 deductibles, and no discounts are taken into consideration.

The data in the chart shows the average cost of an auto insurance policy in Michigan per year with no accidents or violations is $4,820. Get two speeding tickets and the average cost surges to $6,398, an increase of $1,578 each year. Now add in two accidents along with the two speeding tickets and the yearly cost of auto insurance for first-time drivers increases to an average of $12,269. That's an increase of $7,449, or $621 per month, just for not driving responsibly!

You may be paying too much for car insurance

Detroit auto insurance rates are determined by lots of factors which can substantially change the policy price. Turning one year older, buying higher coverage limits, or getting a ticket for careless driving can cause premium changes that can now make some companies more affordable than the competition. Not only may things change on your end, but insurers change rates without warning in order to maintain liquidity for claims. Heavy losses can result in rate increases, while a lower level of claims can produce cheaper Detroit car insurance rates.

For instance, the graph below shows a variety of companies that have the cheapest car insurance in Detroit, MI for a 40-year-old male driver with no prior claims, no tickets, and a good credit rating. Based on his current risk factors, USAA quotes the most affordable car insurance rates in Detroit at $2,256 a year. This is $137 less than the average premium paid by Michigan drivers of $2,393. GEICO, Safeco, MetLife, and Chubb are the remaining cheapest Detroit, MI auto insurance companies.

In this next rate comparison, we will give the driver from the first set of rates a couple of claims, a lower credit score, and a traffic citation. Since each auto insurer uses a different method for setting rates, comparing prices most likely will result in a completely different list of the cheapest companies as shown below.

GEICO now has the cheapest rate in Detroit with Safeco, Pioneer State Mutual, USAA, and Hastings Mutual completing the list. This example shows why Detroit drivers need to perform an extensive rate comparison to find affordable insurance rates for first-time drivers.

Prices can be altered by many factors and can change substantially, so the best price the last time you shopped around may now cost much more than other companies.

The Detroit auto insurance agencies shown below can help you make a decision which is the best policy, since some people have coverage questions and would like to have a little guidance when trying to find lower insurance rates for first-time drivers. It can be difficult to find the best policy on your own, so getting professional guidance from a licensed agent can give you comfort knowing your coverage gives you enough coverage if you have a claim. To find an auto insurance agency near you, click the link at the bottom or click here to compare price quotes.

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