Is it Cheaper to Insure a Sedan or SUV?
Last Updated on November 23, 2022
You like the feeling of towering over everyone on the road and the added security of plowing through snow and muddy conditions with ease.
However, with that extra space in your SUV comes higher gas prices, car payments, and possibly insurance premiums. Before you take the plunge and buy an SUV or opt for a sedan to save on premiums, you need to know how the type of car you drive affects insurance premiums – and also realize that it is not the sole determinant in your premium.
Myth or Fact: SUVs are More Expensive to Insure?
Myth – mostly.
If you have always driven sedans out of fear of higher insurance premiums, you might be surprised to find out that not all SUVs come with a higher insurance price tag. In fact, certain SUVs have comparable insurance rates to sedans (with some coming in even cheaper).
Why? It is simple.
Certain SUVs carry safety features that reduce the risk of accidents and total losses, which means an insurer is more confident in insuring that particular SUV. After all, a two-seater sedan with a sporty engine is more of a risk than a Subaru Forester purchased by a mom to drive her kids back and forth between sports.
Even so, there are instances where an SUV does increase your annual insurance premium – but it is not likely to break your budget.
So, to help you better understand why it is mostly a myth that SUVs cost more, you need to know how the car type affects premiums.
The Cost of Repairing the Vehicle
The cost to repair the car is a significant driving force in premium prices. If you have a flashy sedan from overseas that costs you $30,000 versus a used Ford SUV that costs you $15,000, you can see why the SUV would probably have a lower premium than your sedan. By the same token, a $60,000 Hummer will cost more to insure than a used Toyota Camry.
The higher the sticker price is at purchase (and the higher the market value or replacement value), the more the premium will be – regardless if it is an SUV or sedan.
If you have foreign parts or components that require special body shops, you will also spend more.
Safety Record of the Vehicle
Some SUVs have impeccable safety records; therefore, the insurance company might offer a lower premium for that SUV over one with not-so-impressive statistics.
For example, a Jeep Grand Cherokee has more safety features than a Jeep Wrangler. Also, the Wrangler is often used for off-roading, which means it is more likely to file an insurance claim than a Cherokee used mostly for traveling to and from work. This is why Wranglers tend to cost more to insure than Cherokees and other mid-size SUVs.
Potential for Theft
How likely is someone to steal your SUV versus a sedan?
If you read the National Insurance Crime Bureau’s annual “Hot Wheels” report, you can see which cars are stolen the most. Spoiler alert: it is not SUVs. Sedans and pick-up trucks are stolen at a much higher rate.
The 2021 Hot Wheels Report stated the following vehicles are stolen the most (in order):
| # | Vehicle Make & Model | Thefts | Most Common Year Stolen |
|---|---|---|---|
| 1 | Ford Full Size Pick-up | 44,014 | 2006 |
| 2 | Chevrolet Full Size Pick-up | 40,968 | 2004 |
| 3 | Honda Civic | 34,144 | 2000 |
| 4 | Honda Accord | 30,814 | 1997 |
| 5 | Toyota Camry | 16,915 | 2019 |
| 6 | Nissan Altima | 14,668 | 2020 |
| 7 | GMC Full Size Pick-up | 13,016 | 2005 |
| 8 | Toyota Corolla | 12,515 | 2020 |
| 9 | Honda CR-V | 12,309 | 2000 |
| 10 | Dodge Full Size Pick-up | 11,991 | 2001 |
Potential Damage the Vehicle Can Cause
Here is where the tides turn against your SUV. While their sedan counterparts are stolen more and have the potential to cost more in repairs, they are not likely to cause as much vehicle, property, and medical damage in an accident.
A Chevrolet Suburban will cause more destruction to vehicles and people in an accident than a Honda Accord traveling at similar speeds.
Unfortunately, you cannot argue with physics.
The Other Factors that Redeem You
While your SUV can harm people, and some SUVs do not have favorable safety records, the vehicle type is only part of the equation.
While you think an SUV costs more because John Doe pays more for his than your sedan, think of the other wild cards that might increase his premium:
- Driving Record – More accidents, more tickets, and more insurance claims in the past increase your premiums. How do you know John Doe doesn’t have ten speeding tickets over the past three years?
- Credit Score – The more unpaid debts, the more risk you are to the insurer. A good credit score goes surprisingly far.
- Not Combining Policies – John Doe might pay more for his SUV, but perhaps he didn’t take advantage of combining policies for added discounts, such as home, auto, and life.
Comparing Policies and Knowing Where to Find Discounts Makes SUVs Comparable
Sometimes it is just about looking for potential discounts you might have overlooked, while other times, you might need to make sure your insurer has your current credit history and driving record. The bottom line is if you want to save while driving the SUV you have always wanted, you need to shop around, compare quotes, and know what goes into the pricing.
