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Have you ever considered saving the money you’ve been putting toward your car insurance payments?
Of course, you have.
But how do you do that?
The answer is simpler than you think: Go for cars with the lowest insurance rates.
Auto insurance rates are continuously increasing. Today, $1,427 is the U.S. annual average premium, and it is expected to rise.
Let’s dig into the article to find the cars that have the lowest insurance rates and the key factors determining those rates.
How Car Model Affects the Rate
Car models play a crucial role in determining insurance payouts.
While selecting a car model, note various factors so your financial protection isn’t compromised.
As a rule of thumb, the lower the premium a model requires, the safer it is amongst all other vehicle models.
The least expensive models to insure are the Subaru Outback, Honda CR-V, and Ford Escape, among others. The reason for this is their advanced safety features and minimal recorded accidents.
The latest car models require higher premiums because their spare parts are not readily available.
It makes them super expensive.
It’s also why their repair costs are higher in case of accidents.
Since insurance companies have to cover your insured vehicle’s repair or replacement costs, they charge a higher premium for the newest models.
Interestingly, high-capacity models are safer because of their size and strong build.
They offer the lowest insurance premium rates.
That’s why minivans, trucks, pickups, and SUVs are good options if you’re not willing to pay higher insurance premiums.
You might have noticed some vehicles get into more accidents compared to others. Insurance companies take the annual accident stats of various models to calculate the insurance premium rates.
Similarly, the frequency of claim payments for a specific model affects its insurance payout.
If a model has fewer average insurance claim payments, it’ll also have lower premiums.
Another factor is the added features that can increase your auto insurance rates—for instance, opting for a more powerful engine, advanced GPS, power moonroof, or high-tech sound system.
Car models with advanced features are expensive, and so are their insurance premiums.
Other Factors Affecting Your Rate
Many factors besides the model define the premium rates set by insurers.
Some of these factors are purely based on personal driving experiences, demographics, costs of repairs, the record of auto thefts, the pattern of claims, and the type of car insurance policy you’ve selected.
Age and Experience
You won’t be surprised that your age and driving experience matter for your auto insurance rate decision.
Given a choice, you’d go with a more experienced driver for safety concerns.
That’s why mature and experienced individuals pay lower premiums than younger individuals with less experience.
Cost to Repair the Vehicle
Any vehicle with a history of frequent accidents will have a higher premium. Similarly, the latest models have more repair costs because of the shortage of spare parts.
Frequency of Claims
If an auto model has a consistent record of claims regarding accidents, repairs, property damage, health injuries, etc., then you better watch out!
Such vehicles will make you pay more significant monthly premiums due to the history of frequent claims.
Your car’s mileage matters in determining the premium rate. Generally, the more distance you travel each year, the higher your premium will be.
If you live in an area where car accidents, thefts, and vandalism are more common, the insurance rates will also be higher.
As per stats from Statista (2020), Michigan is reported to have the most expensive car insurance premiums at $5,282.
Type of Insurance Policy
When selecting an auto insurance policy, there are several sub-factors to consider. Policy coverage, limits, and deductibles determine the premium you’ll pay.
For instance, many states require more coverage, which means you’ll pay more premiums, and vice versa.
How to Choose the Car With the Best Rate
No matter how hard it seems to select the best car with the lowest premium rates, these simple considerations can help you.
It’s no wonder why luxury cars have the highest insurance rates. One factor is their special parts, which causes their repair costs to skyrocket.
Another factor is the liability for theft. Expensive luxury cars are always at a greater risk of being targeted for theft.
Insurance companies set insurance rates considering all risks, making luxury car premiums much higher than regular cars.
Don’t Buy the Latest Model
Everyone wants to follow the newest trends, and buying the latest car models is no exception.
In your journey toward financial freedom, the best thing you can do is avoid the latest models.
The newest models offer higher insurance rates for multiple reasons.
The key reason lies in the repair costs, as spare parts and technology are not readily available. Higher repair costs mean higher insurance rates and vice versa.
If a previous model serves the same purpose, why spend extra money on the latest model?
The choice is yours!
Stay Away From Sports
If you want to save some money on higher insurance premiums, try to avoid sports cars.
I know they’re cool, but they’re not so cool in terms of maintenance and insurance.
Insurance is the most expensive for sports cars because of the higher likelihood of road accidents.
A study by Iseecars shows the fatality rate in a sports car is twice that of any other vehicle with all-wheel drive.
The reason lies in the fast speed and compact size as well as driver carelessness and inexperience, making it more prone to accidents.
Don’t Buy a Hybrid
Hybrid cars might seem an ideal option for you. That’s true; they’re putting less pollution into the air and consuming less non-renewable energy.
But in terms of cost and insurance, it’s not a good option.
The repair and replacement costs of hybrid cars make the insurance rates higher than most regular cars.
Cars With the Lowest Insurance Rates
1. Subaru Outback
The top car on my list is the Subaru Outback, which currently provides the least expensive insurance rates.
This model gives above-average reliability with a comfortable interior and efficient performance.
The 2021 Subaru Outback comes with all-wheel drive, providing more traction and stability in all weather.
Average annual premium: $1,400
Starting cost: $26,795
2. Honda CR-V
Honda CR-V is one of the cars with the lowest insurance rates today. The 2021 Honda CR-V has four capacity options: LX, EX, EX-L, and Touring.
Thankfully, all models come with a turbocharged four-cylinder engine, automatic transmission, and two-wheel drive.
Average annual premium: $1450
Starting cost: $25,350
3. Ford F-150
Up next is the most challenging truck, the Ford F-150. The latest model offers fuel economy, a comfortable ride, a large capacity, and a series of features.
The best part is none other than its low insurance costs with its vital build and advanced safety provision.
Average annual premium: $1,505
Starting cost: $28,940
4. Subaru Forester
The Subaru Forester saves you the hassle of installing health and safety equipment, as its in-built safety features are exceptional. That’s the primary reason this car comes with the lowest insurance rates.
The advanced Eyesight Driver Assist Technology and DriveFocus Distraction Mitigation System prevent accidents caused by distractions.
Average annual premium: $1,480
Starting cost: $24,795
5. Ford Escape
Another car with the lowest insurance rate is Ford Escape, also because of its advanced safety features.
The 2021 model comes with adaptive cruise control, Co-Pilot 360 Plus with collision warnings, blind-spot monitoring, automatic emergency braking, and many other safety features.
Average annual premium: $1,480
Starting cost: $24,885
Sound Financial Decisions Are the Key to Ultimate Financial Freedom
Sound financial decisions are the key to financial freedom.
Spending thousands of dollars on your auto insurance is certainly not the best idea.
Carefully analyze the car insurance rates by the model before going for an auto purchase.
Besides the car model, many factors define the annual premiums you’ll be paying. Age, experience, location, gender, driving record, claims history, mileage, coverage, and deductibles are the key factors to consider.
If you’ve got a clean driving history, the insurer can give you a discount for lower accident coverage claims.
Unfortunately, most millennials have to pay more for their auto insurance compared to elderly individuals.
The best thing you can do is avoid luxury and sports vehicles, as they are the most expensive cars to insure.
The key to selecting the cars with the lowest insurance rates is to look at their safety provisions: the more advanced safety features, the lower the risk of accidents, which leads to an overall lower premium.
So, which car would you choose from this list?
How Do I Lower My Premium?
You can considerably reduce the monthly premium by installing anti-theft systems, anti-lock brakes, power steering, airbags, and automatic transmission.
Also, strictly following traffic laws, maintaining a satisfactory credit score, bundling up insurance policies, and leveraging low mileage discounts are easy options to lower your monthly premium.
What Is the Best Car Insurance Company?
GEICO comes at the top with multiple benefits for customers.
It offers exceptional discounts, from the lowest possible premiums to excellent customer service. GEICO’s digital website and app allow users to request emergency roadside help, view digital insurance ID cards, report a claim (or track existing claims), and receive virtual service.
How Much Insurance Do I Need?
You must have insurance coverage of at least 12 years of your annual income for typical life insurance.
You can adjust this amount as per your financial obligations and outstanding debts.
For auto insurance coverage, $500,000 is the minimum amount you need for property damage and injury liability coverage.
Why Do I Need Car Insurance?
Car insurance is essential for your financial protection if your vehicle is damaged by a road accident, natural hazard, fallen object, etc.
The right car insurance will save you time and money in dealing with courts, accident claims, and health injuries caused by your vehicle.