Are smaller cars cheaper to insure?

There is no evidence that smaller cars are cheaper to insure. Car insurance rates are affected by the price of the car, your driving history, and a few other factors.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Aug 31, 2021

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Here's what you need to know...

  • The size of your car does not impact your insurance rate
  • Many factors–such as your driving record, your age, and your credit history–make a difference when it comes to your insurance premium
  • The make and model of your car can affect your premium as well

The premise kind of makes sense for this debate: less car should equal less money. Unfortunately, there doesn’t seem to be any evidence that having a smaller vehicle saves you money on your insurance.

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Factors like your age and driving record far outweigh things such as the types of vehicles that exist, be it by size or body color, although some actuaries may weigh them when determining rates. However, sometimes that means that the more expensive vehicles are the ones that will come with higher premiums, especially if they’re of the sport variety. More speed means they’re more likely to be in an accident caused by a traffic violation.

Does size matter when it comes to car insurance?

Which do you think costs more to insure: a 2012 Kia Forte Koup (with a sticker price of $17,200) or a Mercedes SL (starting at $135,400)?

It turns out that the insurance for the Mercedes SL costs $22,536, or about $5,300 more than the total cost of the Forte Koup, even though both cars are practically the same size.

The size of a car’s sticker price is more of a determining factor in insurance premiums than the size of the car itself.

There simply isn’t any evidence, from state insurance commissions or studies of the most expensive cars, to say that car size is a significant factor in the cost of insurance per vehicle.

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What factors can lower car insurance rates?

There are many factors more important than size that will determine what you pay for auto insurance:

  • Your age – Actuaries use statistics to determine your rates and drivers under the age of 30 are in more accidents; thus they pay more for auto insurance.
  • Your gender – Young women are generally safer drivers than young men and some states, such as Washington, allow insurers to charge less using this information.
  • Your car’s price – The price, not the size, of your car can increase your premiums because expensive cars are more expensive to repair. The cheapest vehicles can sometimes be easier to repair, especially if they have parts that are shared across make and model.
  • Your driving and claims history – If you’re a driver with multiple accidents, then you’re going to pay more for auto insurance. Your rates will also be higher if you’ve made multiple auto insurance claims. But if you have a clean record, you’ll be looked at more favorably as a claimant.

All of these factors weigh more in determining the average premium for your auto insurance rates than the size of your vehicle.

Furthermore, there are things that you can do as a driver to lower your rates.

Some better news if you think that your car might need a little more protection but you think you already have cheap auto insurance: discounts exist! Insurance prices can be a little intimidating, and it always helps to ask what you can do to lower your costs. You can get discounts if:

  • your car has certain safety features built in
  • you’re a good student or have a good credit score
  • you insure more than one vehicle with the same company
  • you buy different kinds of insurance from the same company

Do insurance commissions show a correlation between vehicle size and the price of car insurance?

The state insurance commissions are supposed to be the watchdogs of insurance companies and they often have advice on how to save money on auto insurance fees.

None of them mention the size of the vehicle as a significant factor in determining insurance cost. Rather, what’s looked at falls into the other categories we went over. If your car comes with driver assistance technology, if you have a clean driving record, and even if you have the cheapest model on the market – those will all take precedence over size.

California state insurance commissioner Dave Jones gives all kind of tips on how to save money on auto insurance.

His advice ranges from getting liability-only coverage on older cars to multi-line discounts. He even recommends possibly taking on a higher deductible.

But he does not mention whether the size of your car affects the annual rate that you’ll pay on your auto policy.

The size of your car simply has no bearing on the cost of your insurance rates. You are better off looking at the age of the driver, the individual’s driving record, and even his or her credit record, and the price of the car. Plus, you’ll want to shop around to look for the most affordable rate that will protect your car.

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