Want $7,700 more to spend on a new car? Move from Michigan to Maine before you insure it.
That’s because U.S. insurance premiums on a new vehicle vary wildly by state, according Insure.com, from a high of $206 a month in Michigan to $67 in Maine. All else equal, a buyer can spend $139 a month more for car payments in the Pine Tree State than in the Great Lakes State. That adds up over the life of a loan.
Let’s put this in practical terms: the same buyer in three locations including Alabama, with insurance at $110 a month, a dollar above national average.
“Sally” has $3,000 to put down on a five-year loan at 3.07 percent. Her budget is $595 a month for auto loan and insurance combined. So Sally’s car-loan max is $528 in Maine, $485 in Alabama, $389 in Michigan. With a five-year note, her shopping budget is $32,300 in Maine, $29,900 in Alabama and $24,600 in Michigan.
What can Sally buy?
I searched dealer inventories on Ford.com for vehicles that fit Sally’s budget.
At Townsend Ford in Tuscaloosa, Ala., Sally’s looking at a Platinum White Taurus SEL, with a 3.5 liter V-6, 18-inch painted wheels and leather seats, listed at $29,745.
At Yankee Ford in South Portland, Maine, there’s a Tuxedo Black Taurus SEL, cloth seats but all-wheel-drive and 20-inch aluminum wheels, at $31,470.