What cars have the cheapest car insurance rates?

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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently...

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Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business...

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Reviewed byBrad Larsen
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UPDATED: Mar 13, 2020

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Car insurance is mandatory and depending on your risk profile (and type of vehicle insured) the cost of car insurance can take up a nice chunk of your monthly budget. Choosing which car to buy is quite an enjoyable process however it’s easy to get wrapped up in the attraction of leather seats, a GPS system and seats which act as a full time masseuse while forgetting about the additional bill for car insurance every month.

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The average cost of a new car in the USA (according to the National Automobile Dealers Association) is $28,400 and using a common 7 year auto loan payment at an interest rate of 8% this reflects an average car loan payment of $436. This is affordable for many consumers but how much do you add for car insurance? Car insurance rates can vary but the average cost for a good driver is over $120 a month and some states can be up to 50% more or higher. If you are a high risk driver then its possible to pay even more.

Be Informed Before you Buy

Before buying a car you need to understand the cost of car insurance as part of your monthly financial obligation. While your driving record certainly plays a large role in the premium cost the type of vehicle insured is also a significant factor. Some vehicles have proven safety records, high safety ratings and statistically proven to be lower risk to car insurance companies. Every year various reports are published about the cheapest cars to insure and the results may surprise you. Many hybrid cars and compact cars are nowhere near the list of cheapest cars to insure due to the high replacement value and higher risk of injury in a smaller vehicle.

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An important variable is a vehicle’s “LOSS HISTORY” which is a calculation of the cost of claims drivers of a particular make/model have filed. The more claims car insurance companies pay out for a certain model can negatively influence the cost of car insurance. This doesn’t mean you have a higher chance of getting in an accident as an individual driving a certain type of car but it reflects a risk factor used to score the overall financial risk of insuring such a vehicle. Some cars are prone to suffer more damage in an accident while other simply have higher repair costs. All of these costs are reflected in a vehicle’s loss history and car insurance companies offset the risk with higher premiums.

What are the cheapest cars to insurance?

You can bet a Porsche 911 or a Ferrari Spyder did not make the list but neither did the Toyota Prius or a Honda Civic. Both are very popular and affordable cars but the risk of auto theft for the Honda Civic and the replacement cost of a Toyota Prius are all factors which lead to higher car insurance costs regardless of safety ratings or popularity.

How do safety ratings affect car insurance rates?

Vehicle safety ratings play a great role in the formula for calculating car insurance rates however the “loss history” calculation often trumps any ratings. The upside is that vehicles with higher safety ratings often do end up having much lower loss history claims. The lesson here is a good safety rating alone will not automatically put a vehicle on the list of the cheapest cars to insure.

Does it matter where I live – are all the cheapest cars to insure the same in every state?

Absolutely not. There are many similarities between the list of the cheapest cars to insure by state however depending on where you live statistics like auto theft, accident rates and more are all calculated by region. If you own a Honda Civic for example the rate of auto theft is much higher in California than Small Town, Montana. SUV’s in northern climates may be more expensive to insure than in Florida or California where drivers are less exposed to the hazards of winter driving.

Any list of the cheapest cars to insure is a good read and can help you ask questions when comparing models but its only one reference point any driver should use. You need to shop around and compare car insurance quotes from multiple providers, understand how car insurance works and take advantage of the many discounts available to find the best rates possible. Even then you may never find the cheapest car insurance rates but you will almost always get pretty close to finding the best deal with a good car insurance comparison search.

View the Top 10 Cheapest Cars to Insure

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