This is as cheap as insurance gets

cheapest car insuranceThe 1997 Ford Taurus was never an exciting vehicle, and now it is an old and tired one. Worth perhaps $2,500 but still ubiquitous (Polk says there are 242,390 still on the road), it is the choice of someone who has no choice.

Yet even this vehicle -- or any similar no-frills ride-- represents a huge expense for the 4 million or so Americans working a minimum-wage job.

Minimum-wage workers tend to be young. Half of them are under 25, according to the U.S. Department of Labor.  We priced basic state-minimum auto insurance quotes from coast to coast on that proverbial Taurus, driven by a 24-year-old male with no tickets and good credit.

In Springfield, Ill., he would have to work 55 hours at that state's $8 minimum wage to pay a year's worth of the state's minimum liability coverage on his beater car. In Denver, 103 hours.

And in Albany, N.Y., Trenton, N.J., or Hartford, Conn., he would have to work more than a month of minimum-wage hours to buy the lowest amount of car insurance required. looked at bare-minimum policies for a young driver in each state's capital. Unless you're 24, male, a resident of the particular addresses we used and proud owner of a 1997 Taurus, your quotes probably won't match ours, which are only a snapshot of the rates available through our quote-comparison engine.

They are, however, a good indicator of the financial hurdle confronting any young driver who depends on his own car to commute to school or work.

What a 24-year-old pays for state-minimum liability

* Data missing or unavailable at time of publication

+ New Hampshire drivers must show proof of financial responsibility in the event of an accident

No shortcuts: It's the law

The federal minimum wage is $7.25 an hour, though many states set their own higher and a few go as low as $5.15.

Keeping even an old beater on the road anywhere will consume a large amount of that bare-bones income. Gasoline is a big expense, but ultimately a controllable one:  You can walk, take the bus, combine your trips, or carpool.

But no one will split the cost of your insurance policy, which as a car owner you are legally required to buy in every state except New Hampshire (and even in New Hampshire, most people buy insurance).  States set their own levels of acceptable coverage. Maine and Alaska demand the most: $50,000 to cover the injuries of anyone you might hit ($100,000 total for any single accident), and $25,000 to cover the damage to other cars you cause.

There are very few trade-offs available to save money.

For example, you can't reduce your limits below these minimum amounts. Mostly these state-mandated policies have coverage limits that are very low anyway -- the $10,000 property damage limit required in many states wouldn't come close to replacing a newer-model car.

And you can't raise your deductible. There are no deductibles on liability insurance.

What you can do

The cost of liability insurance has more to do with the driver than the car. (The insurance company isn't going to fix your car, just the person's you hit.) In your search for affordable auto insurance, these are the factors you have some control over:

  • Your driving record: More than one violation or accident is going to hurt.
  • Your credit: If it's dismal, you're seen as a bigger risk of a claim and thus charged more in many states.
  • Your mileage: The less you drive,  the less risk of your hitting someone.
  • Your insurance history: If you've let your policy lapse, even for a few days, you'll pay about 5 percent more than you would have otherwise, according to
  • Your insurance company: No two insurers offer identical rates, and even on state-minimum policies,  premiums can differ by hundreds of dollars a year.

Insurers do look at your car, and if it has a significantly higher rate of claims than most (because, say, it's driven mostly by young drivers), your liability rates will reflect that risk.

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