In addition to being the unofficial start of summer, Memorial Day is also the year’s busiest weekend for car sales and the kick-off to a three-month period in which 27 percent of all annual car sales are recorded. That number may be even bigger this year, given record-low interest rates according to WalletHub’s Q2 Auto Financing Report. With that in mind, WalletHub continued its analysis of the car insurance landscape in search of insights that may help consumers make more informed decisions when they hit the car lot.
As we reported in our California Car Insurance Landscape Report, car insurance premiums are driven by a number of factors — including your driving record and experience, city of residence, the historical characteristics of drivers in your area and even your choice of vehicle. This report focuses on how car insurance premiums vary depending on the type, age, cost and make of the car you buy. You can check out our findings and the methodology we used to conduct this report below.
Car Insurance Premiums By Type: Key Findings
- It is wrong to assume a linear relationship between the price of a car and the cost of insurance. In fact, the more expensive a car, the higher the variation in insurance premiums becomes. Cars in the same price range have a difference in insurance premiums of up to 39 percent;
- Based on our regression analysis, only 22 percent of the increase in insurance premium can be attributed to an increase in the car price. The remaining 78 percent depends on the body type, age, make of the car, etc;
- New sedans are, on average, almost $150 cheaper to insure than 3-year-old sedans from the same price range; and
- As for body type, sports cars are the most expensive to insure — 24 percent more expensive than Crossovers/SUVs, which are the least expensive to insure — followed by trucks, at 13 percent more.
Relationship between MSRP and Insurance Premium
Annual Insurance Premium by Auto Type
Annual Insurance Premiums New vs. Used Cars
Insurance Premiums for Top Sold Cars in the U.S.
Annual Insurance Premium
|2015 Toyota Camry L||$22,970||$2,787.04|
|2015 Honda Accord Sedan LX||$22,105||$2,550.79|
|2015 Toyota Corolla L||$16,950||$2,782.54|
|2015 Nissan Altima® Sedan 2.5||$22,300||$2,861.89|
|2015 Honda Civic Sedan SE||$19,990||$2,746.94|
|2015 Ford Fusion S||$22,110||$2,675.85|
|2015 Chevrolet Cruze LS Manual (FWD)||$17,745||$2,543.45|
|2015 Hyundai Elantra SE||$17,250||$2,753.09|
|2015 Ford Focus SE Sedan||$18,460||$2,762.85|
|2015 Hyundai Sonata SE Sport 2.4L 6-Speed Automatic||$24,300||$2,706.96|
In order to determine the average insurance premium for each car model, we reviewed premium data from the top five auto insurance companies in the U.S.: State Farm Auto, Geico, Allstate Corp. (Esurance for New York), Progressive and Liberty Mutual Group. We then collected the insurance premiums for the three largest states — California, Texas and New York — using a zip code associated with the downtown area of the largest city in each of the aforementioned states. Our limited selection of cities is based on the assumption that even though specific values vary by state, the key relationships between car type and car insurance premiums hold true across the nation.
For this report, we selected cars from the current product lines of major car manufacturers in the U.S. and, unless stated otherwise, chose basic features for each model. We then grouped the cars into different price buckets for our “by Price” analysis. For our “by Auto Type” analysis, we chose car manufacturers that included in their offer the four types of cars (sedans, crossovers/SUVs, sport models and trucks), aiming for the closest price range. Finally, we conducted a “new vs. used” analysis, matching 3-year-old sedans with newer models in the same price range and comparing their insurance premiums.
Insurers use multiple variables to determine auto insurance pricing. In order to assess the impact of a consumer’s choice of car on the price of insurance, we used a base case that we define below.
Our “base case” assumes the following details about the driver:
Base Case – Experienced Female Driver
|Traffic Violation(s): None|
|Annual Mileage: 16,000|
|Licensed: 21 Years|
|Age: 37 Years|
|Marital Status/Gender: Single/Female
Profession: Job that is not Eligible for Discounts
Membership(s) in Organization(s): None
|Distance Each Way/Days per Week of
Commute to Work: 20 Miles/5 Days
|Zip Code: 90012, 77002 and 10004|
|Car Features: Driver-side Air Bag, Standard Performance, No Anti-theft Device|
Our base case includes the following insurance coverage details:
- Coverage of $50,000 for injury/death to one person;
- $100,000 for injury/death to more than one person and $50,000 for damage to property;
- Medical (MED) coverage of $1,000;
- Coverage for collision with uninsured motorist of $25,000;
- Coverage for collision with underinsured motorist (UMUND) of $50,000;
- $1,000 collateral (COLL) coverage; and
- $1,000 comprehensive (COMP) coverage
Note: For Texas, we used $30,000 coverage for collision with uninsured motorist and $60,000 for collision with underinsured motorist, given the state’s different minimum insurance requirements.