Which Cars Are Cheaper to Insure?

Car insurance is a non-negotiable expense when it comes to vehicle ownership, and in some cases, it can be one of the more costly monthly expenses. Unsurprisingly, some vehicles cost more to insure than others.

To understand insurance premiums, it's vital to understand how they are calculated and what factors can contribute to higher costs. Understanding these factors and which models cost more to insure than others is useful information to keep in mind for your next vehicle purchase.

How is Insurance Calculated in Canada?

Every year, the Insurance Bureau of Canada (IBC) releases a comprehensive spreadsheet called “How Cars Measure Up,” a massive breakdown of the insurance figures for every model from every mainstream brand from the past 25 years.

The cost for each vehicle is broken down into four coverage categories: accident benefits, collision coverage, comprehensive coverage, and direct compensation for property damage (DCPD). These are the main costs considered when an insurance claim is filed. The baseline determinant is that the more money an insurance company has to pay out for a given model, the higher its insurance rates will be.

The IBC measures these costs with a baseline of 100 per cent; vehicles with fewer claims in a given year will rank under 100 per cent. For example, a vehicle with a score of 75 in the accident benefits category sees a 25 per cent below-average claim rate.

On the spreadsheet, this scoring system is represented in three colours: green for vehicles that fall below 81 per cent, yellow for average scores between 81 and 120 per cent, and red for vehicles with 120 per cent or more. It's very difficult to find models that perform below average across the board, as all new vehicles are more expensive to insure than older models.

The Good and Bad

While all new cars can be pricey to insure, there are certain makes, models, and body styles that are more affordable than others, while others can be vastly more expensive. Here’s an overview of trends from this year’s report.

Bad: Popular Models

One of the strongest determining factors in high insurance rates is comprehensive coverage that covers fire and theft damage. As a result, the most stolen vehicles in Canada will have very high comprehensive rates. These are also some of the most popular vehicles on sale, such as the Toyota RAV4, Ram 1500, and the Lexus RX 350.

Bad: Luxury SUV

Overall, SUVs are typically more expensive to insure than other vehicle body styles, such as wagons and sedans, with SUVs seeing very high rates for collision and comprehensive claims. Large luxury SUVs specifically suffer from this, with models like the BMW X5, Audi Q7, Mercedes-Benz GLE, and Range Rover having some of the worst rates across the board. This is due to high repair costs and having above-average theft rates.

Mixed: Pickup Trucks

Pickup trucks, on the other hand, typically fare well when it comes to collision claims, but poorly when it comes to comprehensive claims. This is most evident with full-size pickups such as the Ford F-150, Ram 1500, Chevrolet Silverado, and Toyota Tundra, all of which regularly appear on lists of the most stolen vehicles and, as a result, can have relatively high insurance rates.

Good: Small Trucks

On the other hand, small and medium trucks are exceptions, typically seeing some of the lowest rates across all categories, with models such as the Ford Maverick and Chevrolet Colorado placing in green or yellow across all coverage categories. Affordable vehicles tend to have lower insurance rates because repairs and claims are typically lower.

Good: Subcompact Crossovers

More affordable models typically perform well in insurance, with many sedans, hatchbacks, and compact crossovers fairing pretty well in all forms of coverage. Models like the Hyundai Kona, Nissan Kicks, and Volkswagen Taos are relatively affordable to insure. However, mass-volume compact cars like the Honda Civic, Toyota Corolla, and Hyundai Elantra have above-average insurance rates due to their popularity, resulting in a large volume of claims, even if the claims themselves aren’t the highest.

Good: Less Popular Models

Popularity plays a big factor in insurance costs, as less popular models have fewer claims filed. Models such as the Buick Enclave or Mazda CX-30 aren't top sellers in their respective segments, and due to their lower popularity, are involved in fewer claims.

The winner of the most affordable brand when it comes to insurance is Subaru, with most models in the brand’s lineup rated average or below average in all claim categories. Popular models, such as the Crosstrek, Impreza, and Forester, have received exceptional ratings, making them excellent choices for affordable insurance.

In contrast, one of the worst-performing brands is Tesla, with exceptionally high insurance rates across its entire model lineup.

Individual Factors

Aside from the vehicle’s make and model, insurance rates vary heavily depending on the individual and their lifestyle. Factors such as vehicle usage, mileage covered, location of residence, and marital status can all affect an insurance premium.

There are also personal preferences regarding the level of coverage you seek for your vehicle, such as adding collision and comprehensive (fire and theft) coverage. These are often some of the most expensive coverage options, adding to your monthly payment. Understanding how all these individual factors affect your monthly premium is key to making a better-informed financial decision.