Buying a used car is much more complicated than it sounds. There are just too many options, features, models, and manufacturers to choose from at every price range – and then come the insurance costs.
I found this firsthand as I shopped around for a suitable car for my teenage son who was eager after getting his license. While his preferences were more modern and tech-savvy, I had to keep an eye on the costs.
The average American spends around $1500 a year on auto insurance alone. I was looking to drag that amount down to save some money – and that took me hours of premium comparisons.
Unless you live far from society, you must have witnessed the increasing number of ads that advertise the virtues of shopping around for the best-used car insurance rates. And rightfully so.
Comparisons between different insurance providers are critical to ensure you obtain every available discount on your used car and keep costs to a minimum.
Used Cars That Cost The Least To Insure
If you are serious about cutting down on costs, there is more to the trade than just comparing insurance carriers – you need to analyze the car you drive.
While variations exist, changing carriers will not save you much for the same car. The easiest (and most effective) way to save money is to get a used car that is cheaper to insure.
According to Insure, the difference in the average annual insurance amounts for the least expensive and the most expensive cars to insure is a mammoth $2,791!
When observing the most inexpensive used cars to insure, you will find a striking similarity between the models: they are all minivans and SUVs.
Why? Because they are generally family-minded vehicles that are driven around by safe drivers, with cleaner records and a secure driving profile which leads to lesser risk on behalf of the insurance provider.
Additionally, used cars don’t cost as much initially as high-end vehicles and cost less to be repaired which helps to keep the rates affordable.
Here is the list of the cheapest used cars to insure in 2019, compiled using a sample driver profile for all the listed models across different states in multiple ZIP codes, using six major insurance providers.
- Jeep Wrangler Freedom ($1169): The ruggedness and safety features makes Jeep a safe bet for insurance providers.
- Honda Odyssey LX ($1181): An excellent family transport vehicle, Honda is driven by safe, family oriented drivers.
- Subaru Crosstrek ($1236): An inexpensive all-wheel drive, Subaru Crosstrek delivers safety as well as style.
- Subaru Outback ($1238): The midsize wagon-like Subaru Outback is another one from the manufacturer, proving its worth as a safe vehicle.
- Fiat 500X ($1244): An Italian import, Fiat500X offers a unique blend of style and safety among accompanying subcompact crossovers.
- Mazda CX-3 Sport ($1248): Mazda brings its flavor to the crossover line as a more exciting alternative to an everyday subcompact car.
- Mazda CX-5 Sport ($1249): A bigger, better alternative to the CX-3, the CX-5 is one of the most appealing compact SUVs with a strong structure that makes it a safe vehicle.
- Jeep Compass Sport ($1257): Another one from Jeep in the list, Compass Sport is another affordable and cheap-to-insure vehicle in the line.
- Honda HR-V LX ($1258): Honda has manufactured a sturdy and practical crossover with this one, which explains the low insurance rates.
- Ford Escape ($1259): The only conventional passenger car that makes this list, making it one of the most affordable and safe small hatchbacks.
New Cars vs. Used Cars – What To Choose?
Buying a brand new car is undoubtedly one of the greater joys in life, but a comfortable ride doesn’t necessarily require you to break the bank for a brand new car.
However, one common issue that arises is: ‘but the car is old?’ and ‘it will require repairs.’
Used cars are in use now more than ever before because cars are generally getting more durable and often come with a CPO (certified pre-owned) warranty backed by the manufacturer itself!
When compared with the national average, the cars in the list for ‘cheapest used cars to insure’ save you a considerable $240 and upwards per annum. That is in addition to the money you save in initial purchase costs.
Used Cars Are Cheaper To Insure
Yes, you get the point by now. But the ‘why’ still nags you.
The reason why used cars are cheaper to insure is… because they’re older. A used car’s longevity might not be an appeal to you, but it does matter to your insurance provider.
Firstly, your car’s value is the primary calculation point when determining your insurance premium. The higher the cost of your vehicle, the higher the sum they face a possibility of shelling out in case of a tragic occurrence.
In the case of used cars, the initial cost of purchase is considerably lower, which further drags down the premium rates.
Secondly, the cost of repair is also one of the many variables insurance carriers consider when setting their premium rates. Used cars have readily available body parts in case of repair work, as opposed to rare pieces that are often in the case of high-end vehicles and brand new releases.
Additionally, used cars cost less to repair. Body shops tend to charge more in lieu of repairs to newer vehicles – owing to the not-yet-available body parts.
An Efficient and Cost-Effective Option For Teenage Drivers
Much has been said about teenage drivers and what car should they buy. While newer cars appeal more to them, used cars provide them with a cost-effective option that doesn’t burden their finances.
As far as insurance is concerned, teenage drivers are already paying a lot for their inexperience and tendency to get into an accident – a whopping $8,226 for auto insurance for a 16-year-old.
The insurance rates drop down by an astounding 240% once the driver hits 25 – to $2,374. Insurance providers place great emphasis on how the driver drives, historical data, and experience.
In this aspect, teenage drivers are at a disadvantage. A used car offers them the flexibility to save up on much-needed cash by providing a cheaper alternative to buy, which means you can use the left money to pay for insurance.
Factors To Consider When Choosing Suitable Insurance For Used Cars
According to The Balance, the average age of vehicles on the road in the United States has crept up to around 11 years old, which means there are millions of people who are looking to get insurance for their used cars.
Contrary to common perception, older cars don’t automatically cost less to insure. There are multiple factors in play (such as credit history), and insurance providers don’t offer discounts just for driving older vehicles.
The best way to insure used cars includes considering between different insurance policies, including the state regulations which may bind you to purchase necessary coverage.
Some of the factors which affect used cars insurance include:
Collision coverage only covers the damage inflicted on the vehicle in the case of an accident. For a used car that has been in use for some time, dropping this type of coverage is a straightforward way to save money.
The older your car is, the less likely you are to obtain much value out of it. For a safe driver who can set aside some savings for car replacement if need be, opting out of this type of coverage may be cost-effective.
Comprehensive coverage protects the vehicle in non-collision incidents, such as theft or vandalism. Under comprehensive coverage, you are entitled to receive the overall value of your vehicle (after paying the deductible); following the incident.
Having said that, if you believe your used car is not worth paying the hefty insurance amounts per year, it makes sense to drop the additional luggage.
Experts advise considering dropping the high coverage firmly
Classic Car Insurance
Variation exists between insurance providers and the automobile industry’s definition for a car to be classified as a classic car. The insurance industry’s bar for classic car qualification is pretty high – which means have an 80’s gas hog won’t automatically qualify as a classic car.
As per the insurance industry, a classic car is envied by collectors and stored and driven very carefully. A classic car is primarily kept as an attraction and for showcasing purposes.
Insurance policies for classic cars are tailored to their usage – with some customized so much that they provide daily coverage for the rare occasions they pull up on the road.
Car insurance is a numbers game – the cost of your insurance premium will depend on the likelihood of you filing a claim and the value of your car.
A used car offers the perfect mix of modern features and cost-effectiveness, as cars lose the majority of their value in the starting years while being durable for at least a decade.
Among the multiple variables used when calculating insurance premiums, the one that falls within the domain of the motorist is the car they choose to drive. To minimize your premiums, your best bet is opting for a cheap-to-insure used vehicle.
The vehicles listed in the ‘top 10 cheapest used vehicles to insure’ all present a sane, comfortable ride with added safety features that appeal to insurance providers.
Particularly for teenagers, used cars present a valuable opportunity to save on some much-needed money which can be used when paying for expensive, but much-needed insurance.