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Auto Insurance

SUV Vs. Sedan: Which Is Cheaper To Insure?

Insurers determine car insurance rates based on several factors, including the type of vehicle you drive. In many cases, insurance for an SUV will cost less than it would for a sedan. This article will touch on common discrepancies in car insurance coverage you can utilize later when shopping for a vehicle.

SUV vs Sedan

Every state in the U.S. except New Hampshire and Virginia requires drivers to carry auto insurance up to that state’s minimum coverage level for any active vehicle registered in their name. For this reason, car insurance becomes necessary for customers to consider within their monthly budget. When purchasing a new or used car, you should always factor in vehicle type or any other variables that could increase the price of your insurance premium.

Are SUVs Cheaper to Insure? How Vehicle Type Impacts Your Insurance 

SUVs are often cheaper to insure than sedans, despite the purchase price often being higher than other sizes of cars. Vehicle type commonly affects insurance premiums, though this is not always true. Even though SUVs cost less to insure on average, not every SUV will carry lower premiums than every sedan. Insurance companies qualify rates on a vehicle-to-vehicle, person-to-person basis, and various factors can determine your final premium.  

Why Are SUVs Cheaper to Insure Than Sedans? 

Some reasons SUV insurance rates often end up lower than sedan rates include the following:

  • The increased popularity of the vehicles:  SUV sales have surged in recent years, mainly due to their versatility and safety. Their popularity makes them easier to insure because more market and collision data exist for insurance companies to model their policies.
  • Enhanced safety features available on many SUV models:  Advanced safety features make some SUVs less accident-prone and capable of incurring less damage in the event of an accident.
  • SUVs are at less risk of being stolen: Insurers utilize risk assessment when determining insurance rates, including the possibility of theft. SUVs only take up two slots on the 10 most stolen cars in America list, while sedans make up half of the list. Pickup trucks fill out the remaining three spots.

While these phenomena play a significant role in how insurance companies determine your vehicle’s risk factor, other car-related details can also affect your annual premium.

Other Things About Your Car That Affects Your Insurance Rate 

Other factors outside of vehicle type can affect how your insurer will assess your rates, including:

  • Make and Model:  Luxury cars carry higher premiums because they have more expensive parts that would cost more to replace or repair in the event of an accident.
  • Year: Newer cars generally cost more to insure than used cars because new cars carry a higher value. Insurers have to pay more for a higher-value car if it gets stolen or totaled.
  • Condition: A car in bad shape often costs more to insure than a pristine vehicle because the pre-existing damage may correlate to insurance claims filed before you own the car. Insurance companies research the history of insurance losses sustained by a vehicle in their underwriting process and factor these into your premium.
  • Factory Defects:  Cars with defective parts or requiring a factory recall cost more to insure because insurers see them as higher risk. Even minor issues increase the likelihood of an accident, regardless of a driver’s experience level.  
  • Safety Features: Cars with advanced safety features (e.g., automatic emergency braking, collision warnings, pedestrian detection) cost less to insure because your provider will see them at lower risk of an accident and with greater protection in the event of one.

All these factors help companies determine how much money it would cost to repair or replace your car, allowing them to adjust your insurance premium proportionately.

How Much Does Car Insurance for SUVs Cost? 

SUV CategoryAverage Insurance Cost*Sedan CategoryAverage Insurance Cost*
Compact SUV$3,723Compact Car$3,783
Mid-sized SUV$3,837Mid-sized Car$3,907
Full-sized SUV$4,170Full-sized Car$4,493
Luxury Compact SUV$4,240Entry Luxury Car$4,388
Luxury Mid-sized SUV$4,353Luxury Car$5,018
Luxury Full-sized SUV$5,535High-end Luxury Car$6,542
Source: Kelley Blue Book’s True Cost to Own selections; Accessed December 2022; *Calculated by averaging selected vehicle premium costs for a year of coverage.

While SUV insurance often costs less than sedan insurance, your exact premium depends on several other factors not only related to your car but your driving history, where you live, how much you drive, your selected insurance coverages, and any applicable discounts; all of which we explore in detail below.  

Other Things That Affect Your Car Insurance Premiums 

While insurance companies base part of their rates on vehicle type and status, your personal information and coverage preferences can also swing the overall cost of your premium. 

Driver Details 

Insurance companies factor in personal demographics and history when assessing your risk profile, the most significant of which include:

  • Age and Sex: Insurers prefer female drivers and offer them cheaper rates than males. Younger drivers also rank higher on the risk pyramid, resulting in higher premiums.
  • Driving Record: Drivers with multiple accidents or violations on their record could pay twice as much as drivers with a clean record.  
  • Insurance Coverage and Claims History – Insurance providers consider drivers with gaps in their insurance coverage as higher risk and charge them higher premiums. In addition, every insurance claim you make negatively affects your future rates. It pays to have a continuous insurance history, free from any significant incidents.

Coverage Details 

The more extensive your coverage, the more your provider must payout following an incident. Your premium will always rise or fall with the depth of your coverage:

  • Total coverage amounts can range widely between standard plans that meet your state’s legal minimum to ones that reimburse you handsomely following any accident. The higher your reimbursement, the higher your annual premium.
  • Your deductible is the out-of-pocket amount you must pay following a claim. The higher the deductible you elect to pay, the lower your premium.
  • Different coverage types protect you from specific risks you may experience as a driver. While states require liability insurance by law, you don’t need to carry comprehensive or collision coverage. While both carry distinct benefits, they will increase the price of your premiums.

Potential Discounts 

Most insurance companies offer discounts for specific merits associated with driving or your personal life. These include:

  • Bundled Policy Discount: If you bundle multiple policies like home and auto insurance together through one company, they’ll often reward you with a discount.
  • Multi-Car Policy Discount: Covering multiple cars under one auto insurance policy often leads to lower rates for each.
  • Good Student Discount: Proof of good grades in high school or college could qualify you for a lower car insurance rate.
  • Good Driver Discount: Maintaining a clean driving record qualifies you for a discount through most insurers.