Insurance Savings

Choose Your Car Carefully: What Cars Cost the Least to Insure

There are a number of lists out there about which cars cost the least to insure, and for the most part, they are pretty accurate. However, understand that there are a number of factors that go into calculating your auto insurance rate, from credit to driving record, that have nothing at all to do with the type of car you drive. Still, if you are looking to save some money on your auto insurance, starting off with a car that typically costs less to insure gives you a leg up on savings.

Even though having safety features on your vehicle may seem like a great way to save money on your car insurance, it does not necessarily mean you will get the best deal. For instance, a high-end vehicle may come with every gadget known to the industry, but it may also cost more to replace or fix if it is stolen or damaged in an accident. Therefore, this high-end vehicle may not save you any money on your car insurance.

For instance, if your overall budget is in question, spending $40,000 on a car with a lot of safety features with $4500 in insurance premiums over 5 years is not saving you money over the $15,000 car that costs you $4,300 in auto insurance premiums over 5 years. Balance out your desires and perceptions with your reality and budget. However, that $40,000 vehicle might be a safer car and give you more peace of mind.

So, what are some of the best cars to buy if you are looking to get a great deal on your auto insurance? Based on statistics gathered for the 2004 models, the PT Cruiser ranked at the top of the list. A $17,500 vehicle would cost around $4,200 to insure over 5 years (based on rates in Chicago). Other cars in the top 5 were the GMC Safari, Dodge Caravan, the Saturn ION, and the Pontiac Sunfire. None of these cars cost more than $30,000, and all were under $4,500 in insurance premiums over a 5-year span.

How do the insurance companies determine which cars cost less than others to insure? There are basically three criteria that the insurance companies use to determine rates. The first criteria is liability, or how much damage the car will cause to other property in an accident. A large SUV that will cause significant damage will cost more to insure than a smaller car. Safety is another important criteria in determining insurance costs. If you drive a safer car, then your rate will typically be lower.

Finally, the likelihood of damage or theft is a very weighty criteria in determining the cost of insurance for your car. There are a number of lists out there telling you which cars are most likely to be stolen (and the list will probably surprise you). Also, if your car is likely to be damaged easily, then your auto insurance rate will be higher. If you drive a more expensive car to repair, your auto insurance premium will be higher, too.

When looking at cars in relation to auto insurance, you need to make sure you are not buying a car you cannot afford, just because the auto insurance rate seems better. What you will save in auto insurance will not necessarily weigh out the difference in your monthly car payment, so make sure both will fit in your budget.

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