Purchasing a vehicle is a considerable investment, but the purchase price shouldn’t be your only consideration! While fuel economy and regular care and maintenance are a priority for many consumers, all vehicles on the road are required by law to have auto insurance. Car insurance is important for providing financial protection for the policyholder and other drivers in case of a collision.
First-year insurance premiums may cost up to as much as one-third of a new vehicle’s purchase price! Thousands of vehicles are bought daily without the buyers giving thought to the cost of insuring them. There are a variety of factors that determine car insurance rates, such as your driving history, where you live, and the type of vehicle – and some vehicles are cheaper to insure than others.
Before you head out to buy a new car, be sure to take the cost of insurance into consideration. The premiums you pay are primarily driven by the claims history of the specific make and model you choose.
How Vehicles Are Rated For Insurance Costs
Your vehicle’s insurance premium is a calculated reflection of that specific car’s risk profile based on thousands of real-world accidents and claims.
These calculations are based on the Insurance Bureau of Canada’s (IBC) “How Cars Measure Up” (HCMU) claims data, which tracks what it actually costs to fix or replace a specific model across the country. The information comes from actual insurance claims data, collected from most of the car insurance companies in Canada.
Key Factors Determining a Vehicle’s Premium:
- Claim Costs (The Main Driver): Premiums are primarily driven by the cost and frequency of claims for Direct Compensation Property Damage (DCPD), Collision, and Comprehensive coverage (which includes theft).
- Age of Vehicle: Older vehicles often have the lowest insurance costs because their market value is lower and parts are typically easier and cheaper to acquire.
- Safety/Repairability: Vehicles with lower repair costs and fewer/cheaper claims for injuries tend to have better (lower) insurance ratings.
10 Least Expensive Vehicles To Insure In Canada
This list represents the models that have the lowest overall claims costs based on the latest IBC data. These are generally older models that have a low replacement value and simple, inexpensive repairs.
1. Least expensive: 2006 Smart Fortwo
This tiny car’s extremely low purchase price means insurers pay very little to replace it if it’s totaled, keeping premiums rock-bottom.
2. 2005 Ford Escape
This popular early generation compact SUV has parts that are easy to find and cheap, which is a major factor in preventing high repair costs.
3. 2006 Chev Uplander
A dependable minivan with basic, straightforward construction. Its status as a low-cost vehicle makes it inexpensive for insurers to maintain or replace.
4. 2007 Mazda MX-5 Miata
This reliable sports car is often used as a secondary or weekend vehicle. Because it’s driven less frequently than a daily commuter, it generally has fewer collision claims.
5. 2005 Ford Freestar
Another early minivan with a simple design. Its low insurance ranking is primarily due to its low market value and simple repair process.
6. 2005 Dodge Caravan
The Caravan’s immense, long-standing popularity means its parts are abundant and affordable across the country, preventing high claim payouts.
7. 2005 Pontiac Montana
This common mid-2000s minivan is a reliable vehicle with straightforward mechanicals, helping it maintain a very low-risk profile.
8. 2005 Buick Century
A traditional full-size sedan known for its basic features and reliability. Its age and lack of complex technology make it cheap to repair if damaged.
9. 2006 Pontiac Solstice
This distinct roadster is often driven seasonally and by enthusiasts. Its limited use and dedicated ownership often translate to lower overall accident frequency.
10. 2005 Ford F-150
As Canada’s best-selling truck, the F-150’s ubiquitous nature ensures body panels and mechanical parts are widely available, preventing costly delays and expenses for insurers.
10 Least Expensive Newer Vehicles To Insure (2020–2023 Models)
If you are purchasing a modern vehicle, the price of your insurance will be higher, but you can still choose models with better claims performance relative to their peers.
1. Least Expensive: 2021 Buick Encore
This subcompact SUV has one of the best claims histories among newer vehicles due to its low theft risk and moderate repair costs.
2. 2022 Volkswagen Taos
A newer crossover that has demonstrated better-than-average claims performance. Its strong modern safety features likely contribute to lower injury claims.
3. 2021 Subaru Crosstrek
Subaru is famous for safety, and this model’s all-wheel-drive system may reduce the likelihood of certain claims. It’s known for strong repair ratings.
4. 2021 Jeep Wrangler
A surprisingly good performer! Its rugged, durable construction and simpler technology may reduce the severity of impacts compared to lighter-frame crossovers.
5. 2021 Honda Passport
This reliable mid-size SUV benefits from Honda’s reputation for dependability and widespread, affordable repair parts, giving it a favourable claims history.
6. 2021 Subaru Outback Wagon
Another high-safety Subaru model. The Outback’s standard features and popularity make it a low-risk, easy-to-manage vehicle for insurers.
7. 2022 Toyota RAV4
As one of the best-selling vehicles, its massive sales volume ensures parts are inexpensive and widely stocked, which helps keep collision costs low.
8. 2022 Mazda CX-30
This compact SUV has excellent modern safety scores. Its claims data suggests a low claims frequency relative to other new SUVs in its class.
9. 2020 Ford Ranger
This modern mid-size truck benefits from robust repair infrastructure and good parts availability across the country compared to specialized imports.
10. 2020 Cadillac XT5
A luxury crossover that performs better than expected. Its claims data suggests it has a lower theft risk and manageable repair bills compared to other high-end luxury brands.
Post-Pandemic Impact On Insurance Rates
The initial effect of COVID-19 (reduced driving and lower claim frequency) resulted in temporary premium rebates for many Canadians. However, starting in 2022 and continuing into 2023 and 2024, premiums began to climb significantly above pre-pandemic levels.
This increase is due to severe inflation and other post-pandemic factors that dramatically increased the cost per claim for insurers, far outweighing the brief reduction in accident frequency.
That’s why it’s important to take the cost of insurance into consideration when buying a new vehicle. Outside of doing research and choosing one of the models on this list, the best thing you can do is to discuss your policy with your broker so that you can rest assured you are receiving a lower than average rate on a safe and reliable vehicle!
Get a Quote Today!
Of course, the cost of insurance will depend on the vehicle you drive and your personal circumstances.
Don’t wait to find out how much your insurance is going to cost! Contact ARC Insurance today for a free quote or get in touch if you have any questions.
