With the pandemic firmly in the nation’s rearview mirror, U.S. drivers are again racking up the miles on the nation’s highways, and are also being subjected to higher car insurance premiums. According to the analytics company Quadrant Information Services, the average yearly premium for a full coverage policy jumped from $1,771 last year to $2,014 in 2023, which represents a budget-busting 14% increase. The latest Consumer Price Index results for August pegs the year-over-year increase at 19%.
We can largely blame inflation and the auto industry’s recent supply and demand problems for higher auto insurance costs. New vehicles have become more expensive both to purchase and repair, with costlier parts costs and labor rates in particular hiking claims. Higher health-care costs associated with injuries caused by accidents are also at issue here.
Analysts see little in the way of relief down the road, so astute consumers would be advised to tighten their purse strings and become proactive in seeking more affordable auto coverage.
Auto insurance rates are largely based on a policyholder’s personal information. Younger, single, male drivers living in crowded urban areas with poor credit ratings and pockmarked driving records will generally pay the most for coverage. Rates will also differ—sometimes dramatically—from one state to another depending on a variety of factors.
While factors like demographics and past accidents or traffic citations are for the most part intractable, those looking for a new vehicle can salve their premiums a bit by choosing a make and model that’s inherently cheaper to cover than others.
Generally speaking, the most affordable models to insure are those that tend to be driven gently, get top safety ratings and are cheaper to repair should they get into a wreck. That tends to favor safe and sound mainstream SUVs and minivans. The personal finance website Bankrate.com ranks the Subaru Outback crossover SUV as the price leader for 2023 at an average $1,603 for full coverage which will, of course, vary according to a policyholder’s aforementioned personal factors.
The models suffering the highest premiums tend to be luxury models that cost the most to fix and have a steeper cost threshold before being scrapped. Likewise with high-performance cars that practically beg to be driven fast and furiously. For example, those who own a red-hot Dodge Charger sports coupe will face an average $2,824 for yearly coverage, and lots more for those having moving violations and/or at-fault claims on their records.
Electric cars, which carry higher-than-average sticker prices and are based around expensive battery packs that can total some models if they’re damaged in a wreck, also cost more than average to insure. According to Bankrate.com, the compact Tesla Model Y SUV leads the pack for 2023 in this regard, and will set the average owner back $2,804 in yearly premiums.
Other than shopping for a new ride, those looking to keep their car insurance premiums affordable should check prices among multiple carriers every year or so to see if a better deal is available, given one’s personal information. This is especially important among those who’ve recently taken life-changing turns like moving to a new city, getting married or divorced or racking up traffic tickets and/or crashes. Some carriers are willing accept what they perceive as certain levels of risk on a more or less costly basis than others.
Cash-sensitive owners can also opt to lower a policy’s liability coverage to state minimums, raise deductibles for comprehensive and collision damage and drop add-ons like towing and rental car provisions.
Finally, make sure to obtain every discount a given carrier is offering. These include rate reductions for teens and seniors who’ve taken approved safe driving courses, those who bundle coverage for multiple vehicles and/or homeowner’s insurance with the same company, customers who pay a year’s premiums annually and so on. Though it may seem intrusive, many companies now offer lower rates depending upon a motorist’s driving habits, based on data collected from a vehicle’s onboard diagnostics port.
Below, we list the models having the least- and most-expensive annual auto insurance premiums among the 27 vehicles the website considered.
The Cheapest Cars To Insure For 2023
- Subaru Outback: $1,603
- Honda CR-V: $1,635
- Honda Pilot: $1,726
- Ford Escape: $1,734
- Honda Odyssey: $1,735
- Ford F-150: $1,753
- Jeep Wrangler: $1,820
- GMC SIerra 1500: $1,867
- Toyota RAV4: $1,869
- Nissan Rogue: $1,880
The Costliest Cars to Insure For 2023
- Dodge Charger: $2,824
- Tesla Model Y: $2,804
- Mercedes-Benz C300: $2,753
- Cadillac Escalade: $2,743
- Tesla Model 3: $2,577
Source: Bankrate.com, based on an average 40-year-old driver with a clean record and good credit for full coverage. The full report can be found here.