Is it normal for monthly car insurance to cost more than the monthly loan payment?

I'm 22 and I want to buy a new car with a loan. But when I get quotes, the insurance is actually more than the loan payment. I also have a car my parents gave me that's paid off. I was thinking of trading this in, but now I'm not so sure.

“It’s common for younger drivers who finance a new car to pay more for insurance than for the monthly car loan. That’s because you’re considered high-risk (even with no accidents), and you have to have full coverage for a financed car.
In all honesty, you should just keep the car you have now. It’s paid off and you only need to have liability coverage on it. Put the money you’d pay for the new car (both the loan and the insurance) in a savings account and drive your current car until it starts to break down.
You just might find that you have a big chunk of change for a new car in a few years. “
Eric Schad
Answered on Apr 28, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.

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