By Paul Davenport January 24, 2025
Insurance premiums for the average American driver have jumped by roughly 51 percent in just the last three years, according to the latest figures from Bankrate and the U.S. Bureau of Labor Statistics.
That puts the national average to cover a standard passenger car at $2,543—a new highwater mark for premiums, and another factor that’s contributing to the sky-high cost of vehicle ownership in 2025.
While there’s little that drivers can do to control the rising costs of buying or leasing a car in today’s market, there are personal factors that go into calculating insurance premiums that individual policyholders can steer.
In this blog, we’ll unpack the state of auto insurance rates in 2025, the variable factors that go into determining an individual’s premiums, and what this all means in the context of driving employees and determining the best vehicle programs for your business.
A 2024 study from Zebra.com found that just one violation can increase a driver’s insurance rate by 70 percent. To that end, the report found that traffic tickets alone could double your personal insurance rate—and the implications can be even bigger depending on your geography.
For instance, just driving with a suspended license in Massachusetts can push premiums up 90 percent (or roughly $1,200). At the same time, if you’re caught racing in North Carolina, you can expect a 375 percent jump in your premium, with an average increase of almost $4,000.
But even for minor violations, geography plays a huge factor. As Zebra notes in their report, “a ticket for not wearing a seatbelt in California can raise rates by 29 percent ($520), while the same ticket in Maine won’t raise rates at all.”
Looking broadly, however, infractions like driving without a seatbelt (average rate hike of 4 percent) or failing to turn headlights on at night (a 3.4 percent penalty bump) might seem manageable on their own, but can quickly pile up, making getting behind the wheel cost-prohibitive for many drivers.
For broad-based context, here is a ranking of the moving violations that unlock the biggest rate jump:
With this knowledge in hand, how can drivers and businesses get on the defensive to help minimize the rising costs of insurance coverage and the downstream costs?
To begin with, for individuals who are driving their own personal vehicle for work—or are just looking for fair coverage in any context—be sure to shop around. While the breadth of insurance options varies from region to region, some providers are more willing to take on elements of risk without raising premiums for policyholders.
Another strategy is avoiding add-ons to insurance coverage that are increasingly tacked on at the 11th hour. That said, features like roadside assistance or even rental car reimbursement could be attractive for certain driving populations—but they will come at a premium.
Keep an eye out for things like rate reductions for covering multiple vehicles (a perk for multi-driver households) or even adjusting to an annual or semi-annual pay schedule versus monthly to uncover savings opportunities.
Of course, for drivers that use a personal car for work, all of this will have to be acceptable within the terms of their employer’s vehicle program policy.
The implications for businesses really come down to the nature of the vehicle program and driver policies therein.
For organizations that manage an old-school passenger fleet (read: company-provided cars), the implications of insurance coverage are likely the largest. In scenarios where insurers offer a blanket policy to a business, for instance, underwriters will be evaluating the risk based on the driving records of your entire driving workforce. As such, they may lock businesses in at an unnecessary high default rate to “cover bases” across a wide-range of driving behaviors and trends.
To that end, businesses take on 24/7 liability for company cars and are responsible for any violations incurred during off hours, regardless of who is driving. This consideration on its own significantly broadens the risk footprint for businesses—an unnecessary and frustrating scenario considering it’s estimated that only 40 percent of incidents occur during business hours.
Beyond shopping around for providers, businesses are wise to consider reimbursement models that give employees choice—not only in the specific cars they drive (a big factor in determining premiums), but the insurance coverage they choose.
Fixed and variable rate (FAVR) vehicle program strategies, for instance, fold ‘variable’ factors—including coverage and even MSRP value—into the calculations that enable fair, accurate reimbursement from their employer for driving a personal vehicle on the clock. FAVR also considers geography and the regional costs of vehicle ownership in each state or region.
To that end, motor vehicle records (MVR) tracking is a key component of ensuring compliance within FAVR reimbursement models. It’s more than just ‘due diligence’ in this context for businesses to be looking into driver safety records on a rolling basis to avoid surprises—either by the IRS when bills are due, or when premiums spike.
While reimbursements may not be a fit for every business, exploring options and weighing the pros and cons from the lens of insurance coverage is a critical step for any business with driving employees.
To learn more about these reimbursement programs—along with the true costs of each—check out our 101 Guide here.
Auto insurance premiums have spiked dramatically, with the average American driver experiencing a 51% increase over just three years. As of 2025, the national average for insuring a standard passenger car now stands at $2,543 – a new all-time high that significantly impacts vehicle ownership costs.
According to a 2024 study, certain driving violations can dramatically raise your insurance rates:
Even minor infractions like not wearing a seatbelt can increase rates by up to 29%, depending on your location.
Geographic location plays a crucial role in insurance pricing. For example:
Individual drivers can implement several strategies to manage insurance expenses:
Businesses have several approaches to managing insurance expenses:
Note: Always consult with insurance professionals to determine the best strategy for your specific situation.
With Motus, accurately capturing business mileage has never been faster or easier.
Contact us today or take a virtual tour of the Motus Platform.
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