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Which cars are the cheapest to insure?
The cheapest cars to insure may differ depending on the demographics and lifestyle circumstances of the driver/s, as well as the car itself. Generally, the safer the car, the cheaper the insurance premium is likely to be, before all the other factors come into play.
Car insurer, Youi Insurance, used their own car insurance by make and model pages to generate a list of what might be some of the top 9 cheapest new cars to insure:
Top 9 cheapest new cars to insure in 2025
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| Car Make | Car Model | Annual insurance premium range |
|---|---|---|
| Kia | Picanto | $640 – $1402 |
| Toyota | Yaris | $643 – $1375 |
| Honda | Jazz | $644 – $1,369 |
| Hyundai | i20 | $650 – $1,463 |
| Subaru | XV | $655 – $1,260 |
| Mitsubishi | ASX | $670 – $1342 |
| Kia | Stonic | $675 – $1,483 |
| Hyundai | Kona | $681 – $1375 |
| Hyundai | Venue | $698 – $1,387 |
Source: Youi Insurance – based on models available to purchase new in Australia as at April 2025.
There is no current listing for cheapest used cars to insure, but it would likely be influenced by the factors mentioned throughout this article.
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What affects car insurance premium prices?
The cost of your car insurance is often as much about you and the other drivers listed on your policy as it is about the vehicle itself. Car insurance providers in Australia have ratings systems that calculate premiums according to hundreds of factors, which may include:
- Age of the driver(s) listed on the policy.
- Gender of the driver(s).
- Claims history of the driver(s).
- Your car’s make, model and age.
- Your car’s safety rating.
- Where you park your car, including your suburb and where it’s parked overnight.
- The value of your car.
- The costs relating to replacing car parts and making repairs.
- The type of car insurance being applied for e.g. Third Party Property Damage, Third Party Fire & Theft, or Comprehensive cover.
Some of these factors may also affect the insurance excess you have to pay if you need to make a claim. For example, if a young driver was involved in an accident while driving your car, your insurer may charge you a higher excess than if the person involved was 25 or older.
How do drivers affect car insurance premiums?
Men are more likely to be involved in road accidents than women, states AAMI’s Crash Index. This is why men usually pay higher premiums than women for car insurance. Generally, drivers under the age of 25 also pay higher premiums and/or age specific excesses, due to their limited driving history.
Sharing your car with other drivers can also affect a provider’s perception of how risky you are to insure, and the more drivers on your policy, the more greater the perceived risk will likely be, meaning higher premiums.
What else affects car insurance premiums?
The area you live in (and its general crime rate), as well as where you park your car at night can affect how much you pay in car insurance premiums. If you are able to secure your car in a locked garage or avoid parking on the street, you may see a reduction in your premiums. Comprehensive and third party fire and theft cover provide coverage if your car is stolen or damaged by thieves.
Another big factor is the safety of your car. If your car has a higher safety rating (as determined by ANCAP for new cars and UCSR for used cars), your provider is less likely to have to make big payouts for car repairs/replacements, and may be more willing to insure the car for a lower premium, compared to ‘less safe’ models.
Conversely, insurance premiums may be higher if a car is more expensive to repair, due to scarcity or specialisation of parts or challenges sourcing them.The age of the car can also play a factor; for example, vintage or classic cars can be more expensive to fix.
The colour of your vehicle and if you’ve made any modifications to it may also affect your insurance premiums.
Should you insure your car for agreed or market value?
The decision as to whether to insure a car for its market value or agreed value can affect premiums. Some insurers will give you the option to negotiate a car’s agreed value, but this isn’t a common option for most policies. To help decide whether to insure your car for its market or agreed value, you may want to do some research or obtain a few quotes and compare car insurance providers to see how choosing either could affect your premium.
Car insurance budget tips
Some ways to potentially save on car insurance include:
- Increasing your excess premium
- Setting a lower agreed value than the higher market value of your car,
- Considering a more basic policy with fewer features and benefits,
- Foregoing features like roadside assistance, windscreen replacement and rental car usage,
- Taking advantage of car insurance sign-up deals
Also, many insurers offer car insurance deals and discounts that can reduce the price of your premium, sometimes by hundreds of dollars a year.
Depending on the provider and policy you choose, these could include:
- No-claims and safe driver discounts.
- Paying annually instead of monthly.
- Named driver discounts.
- Multi-vehicle policies.
- Multi-policy discounts:
- Online deals and discounts.
- Pay as you drive policies.
You can use Canstar’s comparison tables to carefully consider different car insurance options side by side, and use filters to tailor the search to your individual circumstances.
Cover image source: Nopphon_1987/Shutterstock.com
