South Dakota has a lot of advantages over other states, especially when it comes to a low cost of living. One thing that helps people save money is low car insurance.

A new study by the personal finance website WalletHub South Dakota is the second cheapest state to insure a vehicle.

This isn't news for anyone who has moved to South Dakota from another state. In a world where inflation is making everything go up in price, I'm sure those people were pleasantly surprised to find out that their car insurance actually went down.

Enter your number to get our free mobile app

Here's a personal South Dakota insurance saving story. In 2017, my wife moved to Sioux Falls from a small town in Michigan, the state with the highest average car insurance in the US. There she was paying $150 per month for full coverage on a 2013 Hyundai Elantra and this is with a clean driving record. When she transferred the car to South Dakota, her insurance went down to $65 per month for full coverage.

WalletHub says the reason South Dakota has a low car insurance rates is 51% of the population lives in rural areas. Lower traffic and fewer accidents and claims leading to lower rates.

Another reason is South Dakota has a very low percentage of uninsured drivers. On the other hand, Michigan has a high number of uninsured drivers. Estimates say around 20% of drivers are uninsured. That number spikes to around 60% for cities like Detroit.

Annual average car insurance rates for basic liability coverage for states in the upper midwest look like this:

  • South Dakota - $326
  • Wyoming -$274 (the lowest average in the US)
  • Iowa - $326
  • North Dakota -$370
  • Nebraska -$427
  • Minnesota -$758

However, not everyone in South Dakota pays less.

  • 16-year-olds pay 449% more than 55-year olds.
  • Drivers with a DUI pay 90% than someone with a clean record.
  • People with full coverage insurance, comprehensive and collision insurance, pay 427% more than just basic liability at the state minimum.
Source: WalletHub

See the Must-Drive Roads in Every State