There’s a lot to consider when you’re buying a new car. In addition to the upfront price tag, you may be thinking about on-road costs such as registration, running costs and, of course, insurance costs.
What you might not know is that the car model itself could affect your car insurance costs. In this article, we’ll look at some of the cheapest cars to insure (whether you’re a new driver or more experienced behind the wheel), why some insurance premiums might cost more than others and some of the factors that can make a car cheaper to insure.
How is my car insurance premium calculated?
If you’d like to know how to get cheaper insurance, it helps to understand how your car insurance might be calculated in the first place.
Your insurance quote will generally take into account how expensive your car would be to repair if it were damaged, or how much it would cost to replace if it was considered a total loss.
It can also be impacted – for better or worse – by factors such as:1
- How old you and other drivers are (young drivers under 25 will generally pay more for insurance)
- Your car model, value, age, condition and even the colour
- Where you live and where you normally park your car
- Your driving record
- Your insurance history1
What might determine which could be the cheapest cars to insure?
If you’re buying a new car and want a cheaper insurance quote, it might help to think about some of the following factors – keeping in mind that insurance costs can vary according to personal circumstances and between different insurers. The information below refers to Youi’s own car insurance.
Cost of repairs and replacement
As a general rule, the more valuable the car, the more expensive it can be to insure. If you pay more upfront for the vehicle, you might also pay more to have it insured.
Safety rating
Cars with a higher ANCAP (Australasian New Car Assessment Program) safety rating can be looked upon more favourably when it comes to car insurance costs. The ANCAP Safety website includes a database of safety ratings for tested cars.2
Chance of theft
Certain types of cars are considered more likely to be stolen than others, so the likelihood of a car being targeted by thieves is another factor that might impact your premium. For example, data from the National Motor Vehicle Theft Reduction Council showed that in 2021 the cars most likely to be stolen were the Holden Commodore VE, Toyota HiLux and Ford Ranger PX.3
Modifications
If your car has modifications and after-market accessories, this may impact your car insurance costs. A modification refers to any changes from the manufacturer’s specifications, made to the car at any time after it left the factory where it was built. Examples of these may include alloy wheels, a new audio system, custom paint or sports seats, if they’re added after a vehicle leaves the factory.
What colour cars are the cheapest to insure?
It’s possible that the colour of your car can affect how much it will cost you to insure. In 2021, Canstar found the difference in annual premium could be as much as $51 between colours, based on a sample group of comprehensive car insurance quotes in New South Wales.4
Among insurers who have different premiums for different coloured cars, it was found that white and yellow attracted the lowest average premium, and black the highest.4
A Monash University study found that, compared to white vehicles, a number of car colours – including black, blue, green, grey, red and silver – were associated with higher crash risk.5
“A white car is much easier for other drivers to see on the road compared to a black car,” says Youi’s Marni Jackson, Head of Product – Vehicle. “The cost of repairing a car may also differ depending on the paint, and whether it’s a flat colour or mica (pearl) paint.”
Are electric vehicles cheaper to insure than petrol cars?
Electric vehicles (EVs) are becoming more common on Australian roads,6 and initiatives such as the Federal Government’s National Electric Vehicle Strategy aim to further boost the supply of affordable models. EVs are also typically much cheaper to run than their petrol and diesel counterparts.7
However, this doesn’t necessarily carry over to insurance costs. Car insurance premiums generally take into consideration the value of your car and the likely cost of repair or replacement, rather than its engine (or electric motor, in the case of EVs).
"Where the vehicles are of similar value and age with similar technology, such as advanced driver assistance systems, the premiums for EVs compared to petrol cars can be very similar."
How can I work out my car insurance costs?
One way to potentially get an idea of how much your car insurance premium might be is to check out information provided by your insurer, such as our Youi car insurance calculator page.
Our online car insurance by make and model pages are designed to help you compare the insurance cost estimates of different car models and makes. This can help you get an idea of how insurance premiums might vary depending on your choice of vehicle.
What are some of the cheapest cars to insure?
Using our very own car insurance by make and model pages, we’ve identified a list of what might be some of the cheaper cars to insure.8 The cars we’ve selected are models that are available to purchase new in Australia as at October 2023.
- Kia Picanto – annual insurance premium may range from $544 to $1,182
- Fiat 500 – annual insurance premium may range from $544 to $1,189
- Suzuki Ignis – annual insurance premium may range from $551 to $1,314
- Toyota Yaris – annual insurance premium may range from $551 to $1,161
- Kia Rio – annual insurance premium may range from $573 to $1,382
- Mazda Mazda2 – annual insurance premium may range from $586 to $1,321
- Toyota Corolla – annual insurance premium may range from $607 to $1,323
- Hyundai Venue – annual insurance premium may range from $610 to $1,244
- Kia Stonic – annual insurance premium may range from $614 to $1,380
- Suzuki Swift – annual insurance premium may range from $617 to $1,405
Once you’ve chosen the right car for you, it could be a good idea to look around for cover that’s suited to you and your situation. Consider starting a quote with Youi for car insurance that’s a bit more you-shaped.
1 Source: Canstar – How much does car insurance cost?, 2023
2 Source: ANCAP Safety – Safety Ratings
3 Source: NMVTRC – Theft Risk Rating 2020/21
4 Source: Canstar – 5 factors that may affect your car insurance premium, 2021
5 Source: Monash University – An investigation into the relationship between vehicle colour and crash risk, 2007
6 Source: Electric Vehicle Council – State of Electric Vehicles, 2023
7 Source: NSW Government – Why buy an electric vehicle?
8 Please note these displayed premiums are estimates only and will vary according to personal circumstances and different insurers’ rating & underwriting. The information is based on Youi internal data for Comprehensive car insurance policies sold for the make and model between 30 Nov 2022 and 31 May 2023. 80% of applicable Comprehensive car premiums purchased by our customers fell within or below the indicative premium range shown. Average comparisons are calculated on models where Youi data is available on at least 10 sold Comprehensive policies for that model.
