What are the cheapest cars to insure?

Many things that are not directly related to your car are taken into consideration when calculating how much you pay for car insurance.

Things like your driving experience, where you live and even how you pay your insurance can influence the cost of your premium. But the car you drive is one of the key factors influencing how much you pay.

While there are no outright ‘cheap cars to insure’, there are certain ways in which your choice of car will influence the cost of your premium.

To help you better understand this, we explain some of things that may be taken into consideration when calculating your insurance costs.

Your car's value

The current cost of your car, or more specifically, its market value, will have a major influence on how much you pay to insure it. The market value is determined by the insurer, who uses a third party vehicle valuation service.

You may also be able to come to an agreed value with your insurer, where you both mutually agree on a value for the car within a range that reflects current market values, plus any modifications and accessories that have been added to it.

Cost of repairs and replacing parts

If the cost of repairs and replacement parts for your car is high, this can influence the cost of your policy. The car may not even be of high value.

For example, a car that has a low market value may have parts that are more expensive to replace than a car with a higher market value.

Cars that have parts that are relatively expensive to replace may cost more to repair after a crash so this may be taken into consideration when the cost of your insurance is calculated.

On the other hand, if you drive a popular car for which parts are readily available at competitive prices, it will likely have a downward effect on your premium.

The cars thieves love to drive

Even if it’s not an expensive car, there are some cars that have a high theft rate and that may impact insurance costs. To find out which cars have a high theft rate in Australia, visit the National Motor Vehicle Theft Reduction Council website and enter the make and model of the car into their risk calculator.

High performance cars

If you have a high-performance car it could cost more to insure. High-performance cars include those with a high power-to-weight ratio. Power-to-weight ratio is a measure of the units of power produced by the engine against the total weight of the vehicle. 

Car modifications

Cars with modifications that change the look or performance of the car from its original form, especially those that increase the car’s performance, are likely to attract a higher insurance premium. The modified component may also not be covered in the event of a crash.

Some examples include, suspension upgrades and modified exhausts. Additions such as roof and bicycle racks and towbars are generally covered but with any modification you would have to tell your insurer about it, and they would need to agree to cover it.

Car safety ratings

A car’s safety rating may be taken into consideration when calculating your premium. In Australia there are two vehicle safety ratings programs that give cars a rating out of five stars.

The Australasian New Car Assessment Program (ANCAP) covers new cars and the Used Car Safety Ratings program covers used vehicles. The way in which the ratings are determined for each program is different, so the star ratings are not comparable across both programs. But either way, the higher the star rating, the better.

Always go for four stars or above, whether it’s a new or used car. Safer cars save lives and that’s why RAC doesn’t insure any vehicle built in 2012 or beyond with an ANCAP rating of less than four stars.

Fuel consumption and emissions

Cars with lower fuel consumption are generally also better for our environment as they produce less emissions. You may be eligible for a discount with some insurers if you have a car that produces lower emissions.

Last updated: March 2018