Higher Insurance Costs Whack Small Car, Hybrid Buyers

John Horner
by John Horner
higher insurance costs whack small car hybrid buyers
Buying a small car or hybrid to save money at the pump? Be warned, Big Insurance might get your cash instead of Big Oil. Today’s Wall Street Journal chronicles the tales of woe being told by recent automotive down-sizers. “A 40-year-old male driver would pay an average of $1,704 to insure a 2009 Mini [MINI] Cooper that gets 37 miles per gallon on the highway, according to a study by Insure.com, an online insurance broker. That same driver would pay only $1,266 — a difference of $438 — to insure a Toyota Sienna Minivan, which gets 23 mpg. Similarly, a Honda Civic compact that gets 36 mpg on the highway costs $412 more a year to insure than a Honda CR-V, a small sport-utility vehicle that gets 27 mpg.” The problem: smaller vehicles get in more accidents and those accidents result in higher claims than do larger vehicles, even when driver age and other demographics are factored out. “‘There is always a safety trade-off when you move from a large, heavy vehicle to a smaller, lighter one,’ says Russ Rader, a spokesman for the Insurance Institute for Highway Safety, a nonprofit industry-funded group.” But wait, there’s more!

“Alternative-fuel vehicles in general are even more expensive to insure, though several insurers offer discounts for hybrids. In this case, the main culprit is higher repair costs. The 2009 Camry hybrid, for instance, costs an average $1,957 to insure for that 40-year-old male driver, while a similar conventional 2009 Camry costs just $1,302, according to Insure.com.” Ouch, beside the higher purchase cost and the question of eventual battery pack replacement you have a $655/year insurance adder just for buying the hybrid version of your new Camry. At $2.91/gallon for gasoline you have to drive your Camry over 20,000 miles per year for the fuel cost savings of a hybrid (compared to a base 4 cylinder Camry) to recover at the pump to cover the extra insurance cost. Check out the fuel cost compare side-by-side calculator at fueleconomy.gov to do your own comparisons. Mark my words, there will be laws written to avenge this injustice, or at least to try and make math and statistics go away.

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  • Demetri Demetri on Oct 23, 2008

    "Remind me again why I would want to buy a new car?" I bought a new car, but I sure as hell don't buy full coverage insurance. If you can afford to replace your car, there is zero reason to buy it. Financially, you will always lose when it comes to car insurance. If you finance, you don't have any choice, but that's another losing proposition. As for the story, I think it's bs. A smaller car brakes and maneuvers better to avoid a crash in the first place and is a smaller target. The only rationale is that small cars simply can't do much costly damage when they get run over by an SUV, so the SUV gets the sherman tank discount. It's not a matter of the SUV being safer, it's that the only thing that can squash it is an 18 wheeler. If everyone drove big ass vehicles, the rates would go through the roof and we would all be less safe.

  • David C. Holzman David C. Holzman on Oct 23, 2008

    Good points, Demetri. One of my friends says his insurance did not go up at all when he traded the minivan for a Prius.

  • SCE to AUX I charge at home 99% of the time, on a Level 2 charger I installed myself in 2012 for my Leaf. My house is 1967, 150-Amp service, gas dryer and furnace; everything else is electric with no problems. I switched from gas HW to electric HW last year, when my 18-year-old tank finally failed.I charge at a for-pay station maybe a couple times a year.I don't travel more than an hour each way in my Ioniq 1 EV, so I don't deal much with public chargers. Despite a big electric rate increase this year, my car remains ridiculously cheap to operate.
  • ToolGuy 38:25 to 45:40 -- Let's all wait around for the stupid ugly helicopter. 😉The wheels and tires are cool, as in a) carbon fiber is a structural element not decoration and b) they have some sidewall.Also like the automatic fuel adjustment (gasoline vs. ethanol).(Anyone know why it's more powerful on E85? Huh? Huh?)
  • Ja-GTI So, seems like you have to own a house before you can own a BEV.
  • Kwik_Shift Good thing for fossil fuels to keep the EVs going.
  • Carlson Fan Meh, never cared for this car because I was never a big fan of the Gen 1 Camaro. The Gen 1 Firebird looked better inside and out and you could get it with the 400.The Gen 2 for my eyes was peak Camaro as far as styling w/those sexy split bumpers! They should have modeled the 6th Gen after that.