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Have you ever thought of saving the money you’ve been putting on your car insurance payments?

Of course, you have.

But how do you do that?

The answer is simpler than you think; go for the cars with the lowest insurance rates.

Auto insurance rates are continuously increasing over the years. Today, $1,427 is the U.S. annual average premium, which is expected to rise in the future.

Let’s dig into the article to find out the cars with 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 that your financial protection isn’t compromised. 

As a rule of thumb, the less premium a model requires, the safest it is amongst all other vehicle models.

The least-expensive models to insure are Subaru Outback, Honda CR-V, and Ford Escape, among others. The reason being their advanced safety features and minimum recorded accidents.

The latest car models require you to pay high premiums because their spare parts are not readily available in the market. 

It makes them super expensive.

That’s why, in case of accidents, their repair costs are higher. 

Since insurance companies have to cover your insured vehicle repairing or replacement costs, they charge a higher premium for the newest models.

Interestingly, the 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 a good options for you if you’re not willing to pay extra insurance premiums.

You might have noticed some vehicles get into more accidents as 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 have lower premiums as well.

Another factor is the “added features” that can increase your auto insurance rates—for instance, opting for a powerful engine, advanced GPS systems, a power moonroof, or a high-tech sound system. 

Car models with advanced features are expensive, and so are their insurance premiums.

Other Factors Affecting Your Rate

Many other factors define the premium rates set by the insurers besides the car models. 

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 to know that your age and driving experience matter for your auto insurance rate decision. 

Instinctively, you’d go for a more experienced driver for safety concerns.

That’s why mature and experienced individuals pay lower premiums than young individuals with little experience.

Cost to Repair the Vehicle 

Any vehicle with a history of frequent accidents would charge more 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, considering the history of frequent claims.


Your car mileage matters in determining the premium rate. The more distance you travel each year, the more premium you’ll have to pay, as seen in most instances.


If you live in an area where car accidents, thefts, and vandalism are more common, the insurance rates will also be higher. 

As per the stats from Statista, Michigan is reported to have the highest expensive-car insurance premiums at $5,282 in 2020. 

Type of Insurance Policy

While 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 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.

Avoid Luxury

There’s no wonder why luxury cars have the highest insurance rates to date. One factor is their special parts, skyrocketing the repair costs. 

Another factor is the liability for theft. Expensive luxury cars are always at a greater risk of targets and theft. 

The insurance companies set the 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 to avoid the latest models. 

The newest models offer higher insurance rates because of multiple reasons.

The key reason lies in the repair costs as its spare parts and technology are not readily available everywhere. More repair costs mean more insurance rates and vice versa.

If a previous model serves the purpose, why spend extra dollars on the latest models?

The choice is yours!

Stay Away From Sports 

If you want to save some dollars on higher insurance premiums, try to avoid sports cars. 

I know they’re cool, but not so cool in terms of maintenance and insurance. 

Sports cars are the most expensive cars to insure because of their higher liability for road accidents. 

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, compacted size, driver’s 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 while consuming lesser non-renewable energy. 

But in their cost and insurance, it’s a no-no option.

The repairing and replacing costs make the insurance rate higher than most regular cars.

Cars With the Lowest Insurance Rates 

1. Subaru Outback 

The top on my list is Subaru Outback, as it’s currently providing the least expensive insurance rates. 

This model gives above-average reliability with a comfortable interior and efficient performance. 

The 2021 Subaru Outback comes with an all-wheel-drive to provide 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 car with the lowest insurance rates today. The 2021 model of the Honda CR-V comes with 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 on the list is the most challenging truck, Ford F-150. The latest model offers fuel economy, comfortable ride, large capacity, and a series of features. 

The best part is none other than its low insurance costs with its vital built and advanced safety provision. 

Average annual premium: $1,505

Starting cost: $28,940

4. Subaru Forester 

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 because of 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, coverages, and deductibles are the key factors to consider. 

If you’ve got a clean driving history, the insurer can give you a discount with lesser accident coverage claims. 

Unfortunately, most millennials have to pay more for their auto insurance as 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 their safety provision: the more advanced safety features, the lesser risk for accidents, and 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 the 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 a Car Insurance Company Best? 

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 in 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.


Chris is the founder of FWO, the blog for people looking to reach financial independence and stay inspired along the way.

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