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The Federal Home Loan Mortgage Corporation, or FHLMC, is known as Freddie Mac, the entity created by Congress for the purpose of buying mortgages from lenders to increase liquidity in the market. Freddie Mac was created in 1970 and expressly authorized to create mortgage-backed securities (MBS) to help manage interest-rate risk.

Because the FHLMC buys mortgages, lenders don’t have to keep loans they originate on their books. In turn, these lenders are able to originate more mortgages for new customers. The mortgage market is able to keep capital flowing and offer competitive financing terms to borrowers because of this system. In other words, the market runs more smoothly because of Freddie Mac and its sister company, Fannie Mae, the Federal National Mortgage Association (FNMA).

If you want to know more about how this government-sponsored enterprise works and how it affects your money, read on for details on:

•   What is the FHLMC and what are FHLMC loans?

•   What is the difference between Freddie Mac and Fannie Mae?

•   What are Freddie Mac mortgages?

•   How does the Federal Home Loan Mortgage Corporation work?

Freddie Mac and Fannie Mae

These organizations, with their friendly-sounding nicknames, serve a very important purpose. Freddie Mac and Fannie Mae were created for the purpose of stabilizing the mortgage market and improving housing affordability. These government-sponsored enterprises (GSEs) do this by increasing the liquidity (the free flow of money) in the market by buying mortgages from lenders. Mortgages are then pooled together into a mortgage-backed security (MBS) and sold to investors. The process created the secondary mortgage market, where lenders, homebuyers, and investors are connected in a single system.

In the past, Freddie Mac and Fannie Mae operated as private companies, though they were created by Congress. Fannie Mae came first in 1938, followed by Freddie Mac in 1970. Freddie Mac’s addition in 1970 resulted in the creation of the first mortgage-backed security.

The federal government took over operations at both companies following the financial crisis in 2008. According to the National Association of Realtors®, without government support of Freddie Mac and Fannie Mae, there wouldn’t be very much money available to lend for mortgages.

The Federal Housing Finance Agency (FHFA) has oversight of Freddie Mac and Fannie Mae. On a yearly basis, it assesses the financial soundness and risk management of Fannie Mae and Freddie Mac.

What Is the Purpose of the FHLMC?

As mentioned above, the FHLMC, or Freddie Mac, makes the housing market more affordable, stable, and liquid by buying mortgages on the secondary market. When they buy these loans, the retail lenders they buy them from are able to originate more mortgages to new customers and keep the mortgage market flowing smoothly.

There are many types of mortgage loans; the ones that Freddie Mac buys are known as conventional loans. The mortgage loan must conform to certain standards (such as loan limits) for Freddie Mac to guarantee they will buy these loans.

In general, the process of successfully obtaining a mortgage usually looks something like this once the buyer has made an offer on a house that’s been accepted:

•   The consumer finds a lender, if they haven’t already done so, and will apply for a mortgage.

•   The lender collects documentation required by the loan type and submits it to underwriting.

•   The underwriter approves the loan.

•   The homebuyer closes on the loan, and mortgage servicing begins.

•   The lender sells the loan on the secondary mortgage market to Freddie Mac (or Fannie Mae or Ginnie Mae, depending on what type of loan it is and from what type of lender it originated).

From a homeowner standpoint, they will see the outward mortgage servicing, which is the entity to which they will send their monthly payment and who takes care of the escrow account. The mortgage servicer is the one who forwards the different parts of the mortgage payment to the appropriate parties.

Mortgage servicing can also be sold from servicer to servicer, but this is different from the sale of a mortgage to Fannie Mae or Freddie Mac.

Freddie Mac is also tasked with the responsibility of making housing affordable. There are specific mortgage programs guaranteed by Freddie Mac and offered by lenders.

•   HomeOne®. HomeOne is a mortgage program that offers low down payment options for first-time homebuyers. There are no income or geographic limits.

•   Home Possible®. Home Possible is a program for first-time homebuyers and low- to moderate-income homebuyers. It offers discounted fees and low down payment options.

•   Construction Conversion and Renovation Mortgage. This type of loan combines the costs of purchasing, building, and remodeling into one loan.

•   CHOICEHome® offers financing for real-property factory-built homes that are built to the HUD Code and have the features of a site-built home. This is an option for those buying manufactured homes.

Recommended: What Is the Average Down Payment on a House?

Understanding Mortgage-Backed Securities

After a mortgage is acquired from a lender, Freddie Mac can do one of two things: either keep the mortgage on its books or pool it with other, similar loans and create a mortgage-backed security (MBS). These MBS are then sold to investors on the secondary mortgage market.

What’s attractive about a mortgage-backed security to an investor is how secure it is. Fannie Mae and Freddie Mac guarantee payment of principal and interest. Both Fannie Mae and Freddie Mac issue mortgage-backed securities now.

Does the FHLMC offer Mortgage Loans?

Freddie Mac does not sell mortgages directly to consumers. You won’t see a Freddie Mac mortgage or an FHLMC loan advertised to consumers. Instead, the FHLMC buys mortgages from approved lenders that meet their standards.

Recommended: What Are the Conforming Loan Limits?

The Takeaway

The housing market in the United States arguably benefits from the role of the Federal Home Loan Mortgage Corporation. Lenders can essentially originate mortgages to as many borrowers as can qualify. The free flow of capital created by the FHLMC also means mortgages are less expensive for homebuyers all around. In short, the smooth operation of the housing market owes much of its success to Freddie Mac and Fannie Mae.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQs

What does FHLMC stand for?

FHLMC is an abbreviation of Federal Home Loan Mortgage Corporation. It is commonly referred to as Freddie Mac.

What type of loan is FHLMC?

Freddie Mac guarantees conventional loans that adhere to funding criteria, but it does not offer Freddie Mac mortgages directly to consumers.

What is the difference between FNMA and FHLMC?

Fannie Mae and Freddie Mac originated in different decades and initially had different purposes, but for the most part, they serve the same purpose today of helping to improve mortgage liquidity and availability.

Photo credit: iStock/Andrii Yalanskyi

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOHL-Q125-052

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When you apply for a mortgage, lenders typically require proof of income via pay stubs, W-2s, and tax returns. But with a bank statement mortgage, borrowers can use their bank statements instead of tax documents to verify income.

For self-employed workers, who currently number more than 9 million and sole proprietors (another 20-plus million), using bank statements can demonstrate their real income instead of the lower figure that might be reported on a tax return after deductions.

Read on to learn how you can leverage your bank statements to qualify for a mortgage.

What Is a Bank Statement Mortgage?

A homebuyer who is self-employed, by any name — sole proprietor, independent contractor, a member of a business partnership, freelancer, or gig worker — or anyone else may qualify for a bank statement mortgage loan, also known as a self-employed mortgage, by submitting personal or business bank statements.

A bank statement lists all transactions made in an account during a set period of time, usually a month. The sum of the transactions — deposits, charges, and withdrawals — is used to calculate the beginning and ending balances for that period. In place of tax returns, this account information is used to verify you have enough income and cash flow to cover a down payment and monthly loan payments.

Lenders offering bank statement mortgages may ask for 12 to 24 months of statements to determine the borrower’s net income — how much they earned after taxes and business write-offs. Typically, the bank statements cover the time period immediately preceding the loan application.

How Does a Bank Statement Mortgage Work?

So, what is a bank statement mortgage in practice? As with any mortgages, lenders can consider your credit score, work history, and proof of liquid assets as part of the loan application. But a bank statement mortgage differs in at least one way.

Whether you deposit income from your business directly into a personal bank account or into a separate business account affects how your income is calculated.

Lenders may apply an expense ratio to business bank statements with the understanding that part of the deposits go toward business expenses. This means that only a percentage — usually 50% to 85% — of qualifying deposits is used to calculate income. (However, it’s possible to obtain a lower expense factor with a statement from a certified public accountant or tax preparer.)

If you deposit income to your personal account from your business account, 100% of deposits can count toward calculating the bank statement mortgage you can afford. Without a separate business account, though, deposits to a personal account also receive an expense ratio.

Note that lenders can also factor in your ownership percentage in a business when calculating gross monthly income from business bank statements.

Here’s an example of how these two scenarios would work for the same self-employed person applying for a 12-month bank statement mortgage.

Business bank statement: ($84,000 in deposits / 12 months) x 50% expense ratio = $3,500 gross monthly income

Personal bank statement: $84,000 in deposits / 12 months = $7,000 gross monthly income

With this monthly gross income figure, the lender will assess monthly debt payments to calculate the debt-to-income ratio and determine the loan amount you qualify for.

Recommended: Understanding Mortgage Basics

Who Should Get a Bank Statement Mortgage?

Prospective homebuyers who don’t have consistent cash flow or who lack proof of income from an employer like W-2s and pay stubs could benefit from a bank statement mortgage.

Self-employed workers often claim tax deductions for business expenses to lower their tax liability, which makes their income appear lower on tax forms. Therefore, without using bank statements, many sole proprietors, contract workers, and freelancers will qualify for a smaller mortgage amount than they can actually afford.

Bank statement mortgage loans could also be advantageous for seasonal workers. Since gross monthly income is calculated as an average during the full time period covered by the bank statements, when the deposits occur within that time frame is less important. (Incidentally, if you’re seeking a personal loan there are similar considerations to getting a personal loan when self-employed.)

Recommended: Understanding the Different Types of Mortgage Loans

Pros and Cons of a Bank Statement Mortgage

Bank statement mortgages represent an alternative to conventional mortgage loans that lends itself to self-employed and seasonal workers. But it’s important to consider the pros and cons when shopping for a mortgage.

Pros of Bank Statement Mortgage	Cons of Bank Statement Mortgage
Can qualify without W-2s, pay stubs, or tax returns	May require a higher down payment than other types of home loans
Often eligible for second homes and investment properties	Generally carries higher interest rates
Private mortgage insurance is not required if buyer puts 20% down	Not all lenders offer this loan product
May offer higher loan limits	Can require being in business for years to qualify

How to Find a Bank Statement Mortgage

Bank statement mortgages are considered non-qualified mortgages (non-QM), which means they may lack certain features and protections, so not every lender uses them. Though less common than traditional mortgages, many lenders, including banks and credit unions, offer bank statement mortgage loans.

Since bank statement loans are non-QMs, it’s natural to have questions about mortgage terms and requirements.

For instance, it’s worth asking about mortgage points — fees paid to a lender for a lower interest rate — since the limits on points and fees for a qualified mortgage do not apply.

Recommended: Mortgage Calculator

Alternatives to a Bank Statement Mortgage

Prospective homebuyers have a range of financing options to choose from, even if they’re self-employed.

Getting prequalified and preapproved can give you an idea of how much home you can afford, and a specific amount, respectively.

A mortgage loan originator will convey the loan terms you might qualify for and available financing options.

•   Conventional home loan: Conventional loans tend to come with competitive interest rates and are originated, backed, and serviced by private mortgage lenders.

•   FHA loan: Insured by the Federal Housing Administration but administered by approved private lenders, an FHA loan allows for down payments as low as 3.5% and lower credit scores than conventional loans.

•   USDA loan: A USDA loan, backed by the U.S. Department of Agriculture, is designed to make homeownership affordable for low-income buyers in designated rural areas.

•   VA loan: Eligible service members, veterans, and eligible surviving spouses can obtain VA loans, guaranteed by the Department of Veterans Affairs, with competitive interest rates, no down payment, and minimal closing costs.

If you’ve been self-employed for two years, or one year self-employed plus two years in a similar role with comparable income, you may still qualify for one of the above loans.

Recommended: Help Center for Home Loans

The Takeaway

Being self-employed does not prevent borrowers from getting financing for a home purchase or refinance. A bank statement loan could be a solution if your tax returns don’t fully capture what you can afford. But you may also qualify for a conventional loan or other type of financing.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

Are bank statement mortgages good?

Bank statement mortgages can be advantageous for self-employed homebuyers or refinancers, but they can have higher interest rates and down payment requirements. It’s worth checking to see if you’re eligible for conventional or government-backed loans first.

How much of a down payment is required for a bank statement mortgage?

Typically, bank statement loan lenders require a 20% down payment, or 10% if purchasing mortgage insurance.

Can I use a bank statement loan on a second home?

Yes, bank statement loans can be used for a second home, as well as vacation homes and investment properties.

Do bank statement mortgages work for refinancing?

Yes, homeowners can refinance with a bank statement mortgage, including applying for a cash-out refinance if they have enough home equity.

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Photo credit: iStock/PeopleImages

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency. ^†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.

SOHL-Q125-035

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If you drive a car in Texas, you’ll need to make room in your budget for car insurance. The state requires it. The amount you’ll pay for protection depends on a number of factors, such as your driving record, age, car type, and insurer. Understanding the cost of coverage in your area can help as you’re comparing quotes. Keep reading to learn more about the average cost of car insurance in Texas.

How Much Does Car Insurance Cost in Texas?

The average cost of car insurance in Texas is $1,716 per year, according to a 2025 U.S. News & World Report analysis of cheap car insurance companies. By comparison, the national average is $2,068 per year.

Average Car Insurance Cost in Texas per Month

The average cost of car insurance in Texas is $143 per month, which is $29.33 less than the national monthly average of $172.33. But as the chart below shows, prices can vary greatly among the state’s insurers.

Company	Average Cost Per Month	Average Annual Cost
AAA	$164.33	$1,972
Allstate	$207.08	$2,485
Geico	$116.75	$1,401
Mercury	$124.08	$1,489
National General	$133.92	$1,607
Nationwide	$140.75	$1,689
Progressive	$170.25	$2,043
State Farm	$82.83	$994
Texas Farm Bureau	$71.92	$863
USAA	$111	$1,332

Source: U.S. News & World Report

Average Car Insurance Cost in Texas by City

Where you live can also impact how much you spend on car insurance. The rate of theft, vandalism, and accidents in your area can help online insurance providers estimate how likely you are to file a claim, which can raise insurance costs. In the chart below, notice how rates vary even among 10 major cities in Texas.

Recommended: How to Calculate Expected Rate of Return

City	Average annual cost
Arlington	$2,080
Austin	$1,930
Corpus Christi	$2,013
Dallas	$2,278
El Paso	$2,112
Fort Worth	$2,030
Houston	$2,317
Lubbock	$2,253
Plano	$1,994
San Antonio	$2,181

Source: Insure.com

Average Car Insurance Cost in Texas by Age and Gender of the Driver

Usually, teen drivers (aka new drivers) can expect to spend more on car insurance than older drivers. Gender is another consideration. Because women statistically get in fewer car accidents and have fewer DUI incidents, they tend to spend less on car insurance. Here’s a look at average annual premiums by different age groups.

Company	17-Year-Old-Female	17-Year-Old-Male	25-Year-Old-Female	25-Year-Old-Male	60-Year-Old-Female	60-Year-Old-Male
AAA	$7,298	$7,950	$1,930	$1,995	$1,635	$1,693
Allstate	$2,937	$3,860	$1,221	$1,277	$826	$826
Geico	$6,154	$6,673	$1,505	$1,637	$1,159	$1,257
Mercury	$3,172	$3,581	$1,330	$1,427	$1,081	$1,301
National General	$4,947	$6,485	$1,604	$1,754	$1,179	$1,263
Nationwide	$10,454	$11,707	$1,988	$2,107	$1,104	$1,124
Progressive	$2,821	$3,533	$1,127	$1,307	$923	$923
State Farm	$2,971	$4,646	$1,545	$1,658	$927	$951
Texas Farm Bureau	$3,697	$4,523	$1,342	$1,406	$1,042	$1,100
USAA	$2,936	$3,147	$1,045	$1,078	$695	$693
Statewide Average	$4,541	$5,397	$1,462	$1,552	$1,049	$1,097

Source: U.S. News & World Report

Average Car Insurance Rates After an At-Fault Accident

Your driving record plays a big role in the auto insurance rates you’re offered. In general, the better someone’s record is, the less they’ll spend on insurance. This table compares how much someone can generally expect to spend on car insurance in Texas when they have a clean record and after just one at-fault accident.

Type of Policy	Clean Record Premium	After One At-Fault Accident Premium
Full Coverage Car Insurance	$1,716	$1,799

Source: U.S. News & World Report

Average Car Insurance Costs for Good and Bad Credit

Some insurance companies examine applicant credit scores when determining rates, as certain credit behaviors can indicate how likely someone is to file a claim. Rates can increase for drivers with lower credit scores. See how the average cost of full coverage car insurance in Texas differs between drivers with good and bad credit scores.

Type of Policy	Good Credit Premium	Bad Credit Premium
Full Coverage Car Insurance	$2,096	$4,088

Source: LendingTree

What Else Affects Car Insurance Costs?

Other factors that can affect car insurance costs include:

How Much You Drive

The more someone drives, the more likely they are to get in an accident simply because they are on the road more often. As a result, driving more miles can lead to higher insurance prices.

Recommended: Does Auto Insurance Roadside Assistance Cover Keys Locked in a Car?

Make and Model of Your Car

When setting a rate, insurance companies often consider how expensive it would be to repair or replace the driver’s car. The higher these costs are, the more the driver will likely pay for coverage.

Amount of Coverage

How much car insurance do you need? The amount may be based on your personal preference or your state’s minimum car insurance requirements. But in general, the more coverage you have, the more expensive your policy will likely be.

Related: Car Insurance Terms, Explained

How to Get Affordable Car Insurance

Looking to lower your car insurance costs? Consider these tips and tricks for finding a more affordable car insurance policy.

Compare Quotes From Different Insurers

There’s no need to accept the first quote you’re offered. Instead, shop around with a few different auto insurance issuers to see which can offer the most coverage for the best price.

Recommended: How to Get Car Insurance

Choose a New Car Carefully

If you’re shopping for a new car, you may want to factor in the cost of insurance. The Insurance Institute for Highway Safety shares helpful information on its website, iihs.org, about the cost of insuring different makes and models of cars.

Consider Whether a Higher Deductible Is Right for You

Choosing a higher deductible often means spending less on monthly premiums. However, it’s important to select a deductible you’ll be able to pay if you ever do need to file a claim.

Ask for Discounts

From taking a defensive driving course to earning good grades as a college student, there are many different ways you may qualify for a discount on your car insurance. If you’re looking to lower your monthly bill — and who isn’t? — then it can’t hurt to ask your insurer if you qualify for any discounts.

The Takeaway

The average cost of car insurance in Texas is $1,716 per year, or $143 per month. The amount you’ll spend on car insurance depends on several factors, including your driving record, age, gender, location, credit score, and insurer.

When the unexpected happens, it’s good to know you have a plan to protect your loved ones and your finances. SoFi has teamed up with some of the best insurance companies in the industry to provide members with fast, easy, and reliable insurance.

Find affordable auto, life, homeowners, and renters insurance with SoFi Protect.

FAQ

How much is car insurance in Texas per month?

The average cost of car insurance in Texas is $1,716 annually. This breaks down to $143 per month.

Is car insurance expensive in Texas?

According to U.S. News & World Report, the average price of car insurance in Texas is higher than all but 12 other states in its 2025 study.

Is $300 a lot for car insurance?

In many cases, the average monthly cost for coverage in Texas is well below $300. But remember, the amount you pay depends on a number of different factors. A 17-year-old woman, for example, could very well pay more than $300 per month largely because of her age and lack of driving experience.

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Photo credit: iStock/lightkey

Auto Insurance: Must have a valid driver’s license. Not available in all states.
Home and Renters Insurance: Insurance not available in all states.
Experian is a registered trademark of Experian.
SoFi Insurance Agency, LLC. (“”SoFi””) is compensated by Experian for each customer who purchases a policy through the SoFi-Experian partnership.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOPRO-Q125-004

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Most drivers know that the cost of car insurance in California varies, sometimes by hundreds of dollars. What you pay may be substantially different from what your friend pays, even if you have similar driving records and similar cars. That’s because there are dozens of data points that car insurance companies consider, from your age and Zip code to your insurance deductible and amount of coverage.

Keep reading to find out the average cost of car insurance in California, and how you can lower your premiums without sacrificing the coverage you need.

How Much Does Car Insurance Cost in California?

Drivers in California pay on average $1,782 a year for auto insurance, according to U.S. News & World Report. In a state where housing prices and the cost of living are so high, it stands to reason that car insurance is expensive as well. But what exactly goes into insurance companies’ calculations?

The California Department of Insurance weighs the following information in its estimates:

•   Coverage type. Liability Only vs. Standard.

•   Location. Divided into cities and, in bigger cities, into regions/neighborhoods.

•   Number of drivers covered. Single, couple, or family.

•   Years licensed.

•   Annual mileage.

•   Driving record.

•   Vehicle.

Average Car Insurance Cost in California per Month

Interested in getting car insurance in California? As you shop around, keep in mind that each insurance company has its own formula for calculating insurance rates. The table below shows how premiums vary among the ten largest insurance companies serving California.

Insurance Company	Annual Premium	Monthly Premium
Allstate	$1,884	$157
CSAA	$1,785	$148.75
Farmers	$2,130	$177.50
Geico	$1,352	$112.66
Kemper	$2,007	$167.25
Mercury	$1,503	$125.25
Nation General	$1,703	$141.91
Nationwide	$2,683	$223.58
State Farm	$2,042	$170.16
Wawanesa General	$1,214	$101.16

Source: U.S. News & World Report

Average Car Insurance Cost in California By City

Your location has a big influence on the cost of car insurance in California. Insurance companies actually track traffic volume, accidents, and crime in different neighborhoods across the state. Drivers in more populated areas typically pay more than those who live in small towns or out in the countryside.

Here are average costs for standard car insurance in ten of California’s biggest cities.

City	Annual Premium	Monthly Premium
Anaheim	$2,572	$214.33
Bakersfield	$2,477	$204.42
Fresno	$2,385	$198.75
Long Beach	$2,681	$223.42
Los Angeles	$3,149	$262.42
Oakland	$2,802	$233.50
Sacramento	$2,665	$222.08
San Diego	$2,324	$193.67
San Francisco	$2,777	$231.42
San Jose	$2,406	$200.50

Source: Insure.com

Recommended: Does Auto Insurance Roadside Assistance Cover Keys Locked in a Car?

Average Car Insurance Cost in California By Age of Driver

A driver’s age (or experience level, really) also plays a role in the cost of car insurance. A teenager who has just gotten their license is considered a greater risk by insurance companies. Higher risk translates to higher premiums. This is why many teens share a policy with parents. Once a driver hits age 20 (and still has a clean driving record), premiums often decrease. To find the best deal for younger drivers, compare quotes from an online insurance marketplace.

Age of Driver	Average Annual Cost for Men	Average Annual Cost for Women
17	$4,896	$4,896
25	$2,149	$2,149
60	$1,546	$1,546

Average Car Insurance Cost in California After an At-Fault Accident

Your driving record has a major effect on your insurance premiums. Whether you’re involved in a fender bender or a more serious crash, chances are your car insurance rate will go up after an accident. According to U.S. News & World Report, California drivers who have one accident pay an average of $2,910 per year for coverage. By comparison, drivers with a clean record pay around $1,782 per year for coverage.

Recommended: How Much Does Insurance Go Up After an Accident?

Average Car Insurance Costs for Good and Bad Credit

In California, insurance companies can’t factor in credit scores when underwriting car insurance policies. So your credit history won’t have an affect on your ability to get or renew a car insurance policy — or how much you’ll pay.

Californians should be thankful for this. In New York state, drivers with excellent credit pay on average $2,096, while those with poor credit pay — whoa! — $4,088.

Recommended: How to Get Car Insurance

What Else Affects Your Car Insurance Cost?

As noted above, there are dozens of data points that insurance companies can use to estimate their risk and set premiums accordingly. One is marital status. Another is your car’s make and model, as well as its safety features and overall value.

Aside from the driver and the car, the type of policy impacts premiums. The more coverage you have, the more expensive your policy will be. Your state’s minimum car insurance requirements will get you the most rock-bottom premiums.

The type of deductible you choose also influences your cost. With a higher deductible, your premiums will be lower. The trade-off is that, if you get in an accident, you’ll be responsible for a larger share of the repair bill. In short, you can pay now or pay later.

How to Get Affordable Car Insurance

To find the most affordable car insurance for your profile and needs, it’s best to shop around and compare quotes. These days, online insurance marketplaces make that easy to do.

Once you’ve chosen one or two reputable insurers, it’s important to ask yourself how much car insurance you need. This goes back to the “pay now or pay later” dilemma mentioned above. A no-frills, liability-only policy with a higher deductible will have the lowest monthly premiums. But if you’re in an accident, you may wish you’d chosen more coverage.

Also consider bundling opportunities. Just as you pay less for Internet and TV when you combine services, you can save on car insurance if you purchase it from a company with which you have another policy, such as homeowners coverage.

And finally, ask about possible discounts through organizations and schools you’re affiliated with. Most insurers have a long list of companies they partner with to offer lower rates to customers.

The Takeaway

The average cost of car insurance in California is $1,782. Your premiums may be higher or lower depending on factors related to your background (age, location, driving record), your vehicle (make and model, safety features), and your level of coverage (liability vs. comprehensive, low vs. high deductible). Just remember that the lowest premium may not offer all the coverage you need in case of an accident.

When the unexpected happens, it’s good to know you have a plan to protect your loved ones and your finances. SoFi has teamed up with some of the best insurance companies in the industry to provide members with fast, easy, and reliable insurance.

Explore your options with Experian at SoFi, your personal insurance shopper.

FAQ

How much is the average car insurance per month in California?

Numerous factors go into the calculation of a car insurance premium, including where you live in California, the length and status of your driving record, the type of vehicle you have and its mileage, and more. The average statewide is about $1,782, but the best way to find the most affordable coverage for your situation is to shop around for quotes from multiple insurers.

How much does the average person pay for car insurance in California?

Several factors go into the calculation of car insurance for a California resident. This post breaks it down in multiple ways and offers sample averages based on certain demographics and situations.

Is $300 a lot for car insurance?

In many cases, the average monthly cost for coverage in California is well below $300. But remember, the amount you pay depends on a number of different factors. A 17-year-old, for example, could very well pay more than $300 per month largely because of her lack of driving experience.

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Photo credit: iStock/gguy44

Auto Insurance: Must have a valid driver’s license. Not available in all states.
Home and Renters Insurance: Insurance not available in all states.
Experian is a registered trademark of Experian.
SoFi Insurance Agency, LLC. (“”SoFi””) is compensated by Experian for each customer who purchases a policy through the SoFi-Experian partnership.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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When shopping for car insurance, how much is too much to pay? The answer can vary based on your driving record, age, car type, insurer, and even where you live. But knowing the average cost of coverage in your state can help as you’re comparing quotes. Here’s a look at average prices in New York and how different factors can impact how much drivers there pay for protection.

How Much Does Car Insurance Cost in New York?

Drivers in New York pay an average of $1,808 per year for auto insurance, according to a 2025 U.S. News & World Report analysis of cheap car insurance companies.

Average Car Insurance Cost in New York per Month

The average monthly cost of car insurance in New York is $150.66. However, the amount you pay can vary by insurer, as the chart below shows.

Company	Average Cost Per Month	Average Annual Cost
Allstate	$130.25	$1,563
Erie	$121.08	$1,453
Geico	$122.25	$1,467
Mercury	$385.42	$4,625
Progressive	$77.17	$926
State Farm	$150.50	$1,806
USAA	$116.208	$1,393

Source: U.S. News & World Report

Average Car Insurance Cost in New York by City

Your location can influence how much you pay for car insurance in New York. That’s because when setting rates, insurers often consider the local volume of traffic, accidents, and crime. People living in cities tend to pay more for car insurance than those living in small towns or rural areas. But as the chart below shows, prices can also vary by city. Here are estimates for 10 of the biggest cities in New York:

City	Average Annual Cost
Schenectady	$1,736
Rochester	$1,683
Albany	$1,751
Utica	$1,833
Syracuse	$1,804
Buffalo	$2,125
New Rochelle	$1,939
Yonkers	$2,469
Mount Vernon	$2,623
New York City	$2,600

Source: Insure.com

Average Car Insurance Cost in New York by Age and Gender of the Driver

Your age can impact your premiums. Younger, first-time drivers, for example, often pay more for coverage because they tend to have more accidents than older, more experienced drivers. Gender can play a role, too. In New York, women may end up paying less for car insurance than men because they tend to get into fewer severe accidents.

Age of Driver	Average Annual Cost for Men	Average Annual Cost for Women
17	$5,487	$5,046
25	$2,077	$2,048
60	$1,577	$1,642

Source: U.S. News & World Report

Average Car Insurance Rates After an At-Fault Accident

As anyone who has been in a fender bender knows, car insurance rates tend to go up after an accident. New York drivers with a clean record pay around $1,808 per year for coverage. That amount rises to an average of $1,926 for drivers who have one accident.

But even traffic violations can cause prices to go up. A driver with one speeding ticket on their record pays an average of $2,064 for coverage, and one driving under the influence (DUI) offense causes rates to jump to an average of $2,559.

Recommended: Car Insurance Terms, Explained

Average Car Insurance Costs for Good and Bad Credit

Your credit score doesn’t just impact your ability to secure a loan. It can also play a role in how much you pay for car insurance. According to an analysis conducted by LendingTree, drivers with poor credit pay $4,088 on average per year for coverage, while those with excellent credit pay around $2,096.

What Else Affects Your Car Insurance Cost?

Here are other factors that can cause your car insurance rates to go up — or down.

Marital Status

Married drivers may qualify for more discounts than single drivers, since insurers often place them in a different risk category.

Make and Model of the Car

Your car’s safety features, accident rating, size, and overall value can all affect your insurance rates.

Amount of Coverage

The amount of coverage you need comes down to a number of factors, including your state’s minimum car insurance requirements, your budget, and your lifestyle. As a rule of thumb, the more coverage you have, the more expensive your policy will be.

The type of deductible you choose can also influence your overall costs. A deductible is the amount of money you’re responsible for after an accident before the insurance company pays its portion. With a higher deductible, you pay less money in premiums each month, but will be responsible for a bigger share of the expenses if you get in an accident.

Insurance History

Drivers who allow their coverage to lapse may be more likely to cancel their policy, so having a reliable history with one insurer may qualify you for a lower rate. In fact, it’s possible you’ll get a better quote when switching car insurance carriers than if you purchase insurance after going a few years without it.

Recommended: How to Lower Car Insurance

How to Get Affordable Car Insurance

The cost of coverage often varies by insurer. To find affordable car insurance, it’s a good idea to shop around and compare quotes. You can search online insurance companies and compare multiple car insurance rates.

You’ll also want to figure out how much car insurance you need. Keep in mind your state’s minimum car insurance requirements as well as additional coverage you may need.

If you’re looking to lower your car insurance, there are several strategies to consider. You may want to explore different policy options; look for bundling opportunities, such as getting your home and auto insurance from the same company; ask about possible discounts; and consider whether a policy with a higher deductible makes sense for you.

The Takeaway

Drivers in New York pay an average of $1,808 per year for car insurance. However, the amount you pay can depend on several factors, including your age, gender, driving record, credit score, marital status, and where you live. It helps to shop around and compare multiple quotes to find coverage that fits your needs and budget.

When the unexpected happens, it’s good to know you have a plan to protect your loved ones and your finances. SoFi has teamed up with some of the best insurance companies in the industry to provide members with fast, easy, and reliable insurance.

Find affordable auto, life, homeowners, and renters insurance with SoFi Protect.

FAQ

How much is car insurance in New York monthly?

The average cost of car insurance in New York is $150.66 per month. But you may end up paying a different amount based on a wide range of factors, such as age, gender, driving record, credit score, and location.

How much is car insurance in New York for a 25-year-old?

A 25-year-old man pays an average of $2,077 per year for car insurance, according to a 2025 analysis conducted by U.S. News & World Report. Women of the same age pay an average of $2,048 per year. Gender and age are two of several factors that can impact how much you pay for coverage.

Is $300 a lot for car insurance?

In many cases, the average monthly cost for coverage in New York is below $300. But premium amounts vary based on a number of factors. An 18-year-old male driver, for example, could very well pay more than $300 per month because of his age and lack of driving experience.

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Photo credit: iStock/cmart7327

Auto Insurance: Must have a valid driver’s license. Not available in all states.
Home and Renters Insurance: Insurance not available in all states.
Experian is a registered trademark of Experian.
SoFi Insurance Agency, LLC. (“”SoFi””) is compensated by Experian for each customer who purchases a policy through the SoFi-Experian partnership.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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