Drivers in this city pay $3,700 more for car insurance than the national average, data shows

The price you pay for car insurance depends on a number of considerations, like the value of your car, your coverage amount and even your credit score. But one of the most influential factors in your auto insurance premium isn't your driving record — it's where you live.

Car insurance rates vary greatly from one city or state to another, according to data from Policygenius. While the national average premium is $1,652 annually, drivers in some places pay far more. 

Policyholders in Detroit pay the highest annual auto insurance rates, at $5,357. That's $3,705 higher than the national average. Drivers in Michigan have historically had some of the highest car insurance premiums of any state in the country.

Perhaps unsurprisingly, the cost of car insurance is also very high in New York City, a place known for its bumper-to-bumper traffic and a high cost of living. New Yorkers pay a little more than $4,800 annually for auto insurance. 

This isn't bad news for all drivers, though. Car insurance premiums are far below the national average in Wilmington, N.C., at $994. In fact, four of the top five cities with the cheapest car insurance are located in North Carolina, which also happens to be the state with the lowest annual premiums.

Keep reading to learn more about how location impacts auto insurance rates, as well as what you can do to save money on car insurance. One way is to shop around across multiple auto insurance companies to find the lowest rate possible for your situation. You can visit Credible to compare insurance quotes for free without impacting your credit score.

RETIREES STRAINED BY HIGHER HOME INSURANCE RATES IN FLORIDA: HERE'S HOW TO CUT COSTS

Average auto insurance rates vary significantly by location

Policygenius' data shows that the cost of car insurance depends greatly on the city and state in which you live. Out of the top 25 costliest cities for auto insurance, half of them are in Florida, three are in Louisiana and two are in Michigan. 

Drivers in these states generally pay much more for their annual car insurance premiums. Florida is the most expensive state for an auto insurance policy, with annual rates averaging $2,914. Louisiana comes in a close second with a $2,906 yearly premium. And Michigan is third — drivers here pay $2,377 per year for car insurance.

CAR INSURANCE RATES 'AREN'T SKYROCKETING' DESPITE 4% ANNUAL INFLATION: REPORT

This is in line with a recent analysis from the Insurance Research Council (IRC), which found that Louisiana, Florida and Michigan are the least affordable states for car insurance. The report compared the average auto insurance expenditure as a share of the policyholder's income, finding that Louisiana drivers spend 3.09% of their income on insuring their vehicle. 

The IRC also found that a number of auto insurance costs for drivers vary by state, including:

• Accident frequency — Poor road conditions, greater traffic density and higher speed limits can lead to more frequent accidents in some locations.
• The cost of claims — Depending on where you live, it may be more expensive to repair your car, seek medical care or hire an attorney, for example.
• Litigation climate — Some states have different laws for settling insurance claims, while others have more stringent legal requirements for auto coverage.

Moving to a different city or state would effectively help some drivers save money on car insurance, but it's not a practical solution. There are several other ways to cut your auto insurance premium, whether it's by changing your policy or taking defensive driving courses. Another strategy is to shop around across multiple insurance companies to find the lowest rate possible for your circumstances. You can visit Credible to compare car insurance quotes for free without impacting your credit score.

THESE ARE THE TOP 10 MOST STOLEN VEHICLES IN AMERICA, REPORT FINDS

How to lower your car insurance costs

Although drivers in some parts of the U.S. are likely to have higher auto insurance costs, there are still options for saving money regardless of where you live. The Insurance Information Institute (Triple-I) estimates that policyholders may be able to save hundreds of dollars on their premiums through the following strategies:

• Raise your deductible. A higher deductible may offer lower premiums, but it also means you'll have to pay more out-of-pocket if you need to file a claim.
• Bundle insurance policies. Purchasing auto and homeowners insurance from the same insurance company may help you save up to 25% on your annual premiums.
• Build your credit score. Drivers with a good credit history may see lower insurance rates, while those with a bad credit report will see higher costs.
• Seek out policy discounts. Some insurers offer low mileage discounts and safe driver discounts. You may also save money by taking a defensive driving course or drivers education course.
• Do your homework. Rates vary from company to company, so it's important to compare quotes from at least three car insurance companies to find the lowest premium possible.

You can compare free quotes and learn more about auto insurance coverage by visiting Credible.

AVERAGE HOME INSURANCE RATES ARE RISING FASTER THAN INFLATION — AND THEY'RE NOT LIKELY TO SLOW DOWN

Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.