Small cars, hybrids more expensive to insure
If your goal is to do nothing more than cutting down your petroleum usage for either political or environmental reasons, a small car or hybrid seems to be the way to go. If your desire is solely to save money, there are many more costs to factor into your decision. One of them is insurance, as a recent study suggests that small cars and hybrids are considerably more expensive to insure on average than their larger and hungrier siblings. For instance, all other things being equal, a Honda CR-V is less expensive to insure than a Honda Civic by an average of $412 per year. Another? The Toyota Camry hybrid will cost you $650 more than its non-hybrid counterpart. Some reasons why the numbers are what they are include higher repair costs and the fact that compact cars are sometimes stolen more often than larger cars and SUVs. We should add that shopping around can prove valuable, as some insurers actually provide discounts for fuel-savers.
[Source: The Wall Street Journal]
Reader Comments (Page 1 of 1)
shadestrades 1:46PM (10/24/2008)
My auto insurance went down when I dropped my 2004 Ford Expedition and added my 2008 Toyota Prius. Your insurance is all going to depend on which small car you buy and what your credit score is. The emphasis is on your credit score.
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brandon 1:59PM (10/24/2008)
Huh? More to insure? Where I'm from (California) Most insurance companies offer discounts if you drive a hybrid, which makes them cheaper to insure.
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Michael 3:25PM (10/24/2008)
Not exactly great insight. Since hybrids cost more to buy than their counterparts insurance is higher. End of story.
The higher insurance costs can be offset by lower maintenance costs, lower gas costs, tax credits (if you can get them), a discounted insurance rate (if you can get them) and a higher resale value.
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Chris 4:07PM (10/24/2008)
I got a 10% premium reduction across my entire policy when I added my hybrid. There's no way that the difference in the rate for my hybrid model compared to a non-hybrid of the same is greater than what the 10% reduction gave me.
I'm not affiliated other than having a policy with them but check out http://www.hybridtravelers.com/.
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wildgoosechase 9:33PM (10/24/2008)
Smaller cars are also more likely to be a total loss in an accident. While true that the occupants will be Ok, in anything beyond a fender bender the cruple zones are impacted resulting in a total loss. That same impact in a Suburban may require a new bumper. Smaller cars tend to have lower values which them again more likely a total loss.
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Brn 5:01PM (10/24/2008)
To those who's hybrids cost less to insure: Is there some kind of government insurance incentive? Otherwise it doesn't make sense. Hybrids cost more to make and cost LOTS more to repair, assuming all else is equal.
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Erik 5:23PM (10/24/2008)
Your personal driving record and your age are only part of what the insurance company sees. They also look at the car you've chosen and figure you're part of the general group that would choose such a car.
For a variety of reasons, young drivers often opt for smaller cars such as Civics, Neons, etc. Young, inexperienced drivers are more likely to be involved in accidents, as are drivers who are attracted to the sporty performance of these cars. So from the insurance companies' point of view, these cars are statistically more expensive to insure.
I suspect just the opposite is true for Hybrids: Only the older, more experienced, and dare I say boring drivers can afford them and would choose them. Even though repairs may cost more, statistically these cars are probably cheaper for the insurance companies.
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gorr 6:00PM (10/24/2008)
They are charged more money because they are the unsecure type of consumers and any smart compagny know how to extract money out of insecurity feelings, ask the B87H family and toyota.
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Zack 7:06PM (10/24/2008)
Not that anecdotes are proof to the contrary, but when I replaced my 2006 Dodge Dakota with my 2008 Honda Fit, my insurance went down $120 a year.
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BoneHeadOtto 10:43PM (10/24/2008)
anyone worried about saving money should not be financing a car to begin with. Purchase the car outright and just get liability rather than bumper to bumper coverage. I pay less than $400 a year to insure a WRX. Not to mention all the money you are throwing down the drain to interest. Just buy what you can afford.
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kballs 3:12PM (10/25/2008)
Statistically, the models they're talking about (both hybrid and non-hybrid) are some of the most stolen cars (Civic, Camry)... because they also have some of the highest sales, thieves steal them for parts. The hybrid versions cost more to buy so they also have a higher ACV and repair cost. While hybrid models cost a bit more than the non-hybrid counterpart, they're still overall less costly to insure than large expensive cars and SUVs.
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