The cheapest cars to insure in 2025
Car insurance can be costly, but there are still some cheap options out there. Here’s our round-up of the new models with the lowest premiums.....
Owning a car is expensive, and one big reason for this is the cost of insurance. The good news is that premiums have fallen each quarter this year, and are now £56 cheaper than they were a year ago. That means between July and September 2025 the average annual cost of comprehensive cover for a private motorist was £551, according to data from the Association of British Insurers (ABI), which tracks the cost of 28 million policies bought by drivers each year.
Although prices have dropped, the rising cost of repairing cars and a continuing problem with car theft are costing insurers so much money that it’s stopping premiums from falling further. In fact, these factors have contributed to the insurance industry paying out £3 billion in claims from January to the end of September 2025.
So is there such a thing as ‘cheap’ car insurance anymore? In the context of the current economic climate, there is, but first it's worth looking at what defines a vehicle's insurance premium.
Every car is assigned an insurance group rating, which takes into account the vehicle’s price when new, the level of safety equipment fitted to it and the anti-theft features it has. The rating also considers how susceptible it is to crash damage, and how much, on average, it will cost to fix. A car is then placed into a price bracket between 1 (the lowest) and 50 (the highest), with the corresponding quotes based on this, plus a person’s profile.
However, a lower insurance group doesn’t necessarily equate to the lowest premium, so if you’re considering a number of different models it’s worth getting quotes for them all. Prices can also vary significantly between trim and engine grades for one particular car, and other factors, such as a driver’s age and circumstances, will also alter the price quoted.
One way to cut premiums that can be beneficial for new or younger drivers is a ‘black box’ policy. This involves having a small telematics device plugged into the car that measures a variety of metrics, including speed, braking and the time of day you’re driving. It uses the data to judge your driving performance, and it may reward sensible drivers with lower premiums. However, those who are deemed to be driving poorly can be penalised, and the other restrictions they place on drivers can also make them unpopular.
So, for the purpose of this story, we’ve searched for non black box quotes. Our driver is a 23-year-old single male, who is a baker by profession and lives in Grays, Essex. He has a clean licence, five years’ no-claims bonus, on-street parking and covers 8000 miles per year. So, what are the 10 cheapest quotes he’d get?
Note: Monthly PCP figures are based on a 48-month term, 10% deposit and 8,000-mile driving cap, unless stated otherwise in brackets.
Read more: The 10 cheapest new cars you can buy - reviewed and rated
Strengths
- Cheap to run
- Good level of safety kit
- Warranty of up to 10 years
Weaknesses
- Cramped in the back
- Smaller boot than rivals
- Top-spec trims will be priced close to a Toyota Yaris
Cost of insurance £740
Version 1.0 VVT-i Pure | Insurance group 5A
Behind that angry puppy face is the cheapest new car you can currently insure in the UK. Sure, you could buy a similarly-priced, similarly-sized EV instead, but there’s much compromise involved. The Leapmotor T03, for example, would cost our baker over £1500 to insure. And then there’s the Dacia Spring, whose interior feels completely Spartan next to the Aygo X, and it also takes 4.5secs longer to hit 62mph. The Spring runs out of charge after just 140 miles too, while the Aygo will return over 400 miles of motoring per tank. It is arguably the perfect car for a 23-year-old living through a cost-of-living crisis.
Read our full Toyota Aygo X review
Strengths
- No cheaper car to insure
- Great safety kit
- Warranty of up to 10 years
Weaknesses
- More expensive to buy than Hyundai and Kia rivals
- Higher trim levels come very close to the Yaris’ starting price
- Rear could get cramped
Strengths
- Really tidy handling
- Decent real-world fuel economy
- Great infotainment and well-equipment as standard
Weaknesses
- Engine line-up is among the slowest of any new car
- Quite firm low-speed ride
- A Dacia Sandero is much roomier
Cost of insurance £768
Version 1.0 Pure | Insurance group 4
A direct rival to the Hyundai i10, the skinny dimensions of the Picanto make it a truly fabulous thing around the corners, which offsets the fact that it’s one of the slowest cars in its class. That shape, combined with the efficient 66bhp 1.0-litre engine, also returns a decent 50mpg in mixed conditions. Factor in Kia’s 100,000-mile/seven-year warranty, in addition to our best price of £15.5k, and the i10’s strengths become obvious. It’s also one of the last purely-combustion small cars left standing, so it may remain a mainstay in the segment for many years yet.
Read our full Kia Picanto review
Strengths
- Second cheapest car to insure in the UK
- Handling is among the best in-class
- Tempting real-world economy
Weaknesses
- One of the slowest new cars around
- Ride can be firm at low speeds
- Not as spacious as comparably-priced cars
Strengths
- Comfy and quiet for a small car
- Remarkably roomy in the rear
- Well equipped as standard
Weaknesses
- Disappointing safety rating
- Entry-level engine is a bit lacklustre
- Slow-witted automatic gearbox
Cost of insurance £771
Version 1.2 Advance | Insurance group 3E
The i10 has been one of the most popular cars in the UK for some time now, and it’s clear to see why. It’s easy to drive and smooth across almost any road surface in the real world, even with the largest 16in alloys chosen, which makes it the comfiest city car around. The 1.2-litre four-pot is the one to have, since it slices a large chunk off the 1.0-litre variant’s 15.6sec time to 62mph for not much more money. With the Advance trim chosen, you’ll get an 8.0in multimedia screen, plenty of driving aids programmed in and smartphone connectivity.
Read our full Hyundai i10
Strengths
- Cheaper than the Kia i10
- Quiet and refined
- Spacious enough for its size
Weaknesses
- More expensive to insure than the i10
- Automatic gearbox is hopeless
- Safety record is poor
Strengths
- Huge boot
- Roomy interior with clever features
- Fairly supple ride
Weaknesses
- Renault Clio has a smarter interior
- Not as practical as the Honda Jazz
- Entry-level engine only suited to town driving
Cost of insurance £781
Version 1.0 MPI 80 SE Edition| Insurance group 4E
To drive, the Skoda Fabia isn’t quite as exciting as the Renault Clio or Seat Ibiza, but it’s quiet, refined and quick enough for what it is. We’d also highlight its simple control layout, comfortable driving position and superb all-round visibility, and though it does feel chintzy in places, the Fabia’s packed with clever features and storage spots. Opting for the entry-level SE Edition, our driver can get a PCP deal and insurance combined for under £350 per month. That’s not quite enough to break into the podium, but still hugely tempting since this recipe has only been improved over the last 25 years.
Read our full Skoda Fabia review
Strengths
- Quiet, comfortable ride
- Lots of engines to choose from
- Good value for money
Weaknesses
- More expensive to buy and insure than Hyundai i10 and Kia Picanto
- Practicality isn’t the best
- No mild-hybrid option available
Strengths
- Good to drive
- Generous interior space
- Comfortable ride
Weaknesses
- Fiddly touch-sensitive controls
- Gutless entry-level petrol
- VW’s reliability record
Cost of insurance £797
Version 1.0 TSi Life | Insurance group 9E
While many city cars have been retired over the last few years, the Polo just celebrated its 50th anniversary – and VW is showing no signs of slowing it down. First the bad points: it gets the annoying haptic controls, the warranty isn’t great and it starts at over £23k, making it one of the most expensive cars in its class. But here’s the good: it feels like a quality item, there’s lots of kit from standard and it’s great to drive, thanks to the supple ride and well-weighted steering. Our young Essex native can insure one for under £800 too.
Read our full Volkswagen Polo review
Strengths
- Best in-class interior
- Ride is comfortable at any speed
- Generous kit list across all trims
Weaknesses
- Expensive to buy
- Entry-level engine is gutless
- Fiddly touch-sensitive controls
Strengths
- Amazingly good value
- Lots of space for passengers and luggage
- Comfortable ride
Weaknesses
- Poor safety rating compared with rivals
- There are more entertaining small cars to drive
- Some other small cars are quieter
Cost of insurance £834
Version 1.0 TCE Expression | Insurance group 14E
The UK’s cheapest car after the Citroen Ami (which is a quadricycle), the Sandero’s sales pitch is simple: provide everything you need for modern motoring and not much else. That's precisely why our baker can both buy and insure a new example for under £16k. It has a simple 1.0-litre engine, lots of space for people and things, and enough technology to aid (and not overwhelm) your journeys. Inevitably, there are some flaws in making it so affordable: a poor two-star Euro NCAP safety rating, lots of outside noise leak at speeds, and an underwhelming 12.2sec sprint to 62mph.
Read our full Dacia Sandero review
Strengths
- The cheapest ‘car’ Brits can buy
- Comfortable ride
- Plenty of space
Weaknesses
- Some more upmarket rivals are cheaper to insure
- Safety record is a concern
- Not particularly engaging to drive
Strengths
- Comfortable ride
- Surprisingly spacious interior
- Cheap running costs
Weaknesses
- Rivals are more fun to drive
- So-so interior quality
- Reliability could be better
Cost of insurance £866
Version 1.0 TSI Life | Insurance group 13E
Positioned between the Polo hatchback and T-Cross small SUV, the Taigo shares its underpinnings with no less than nine cars. We’d go for the entry-level 1.0-litre TSI engine and manual gearbox. It’s a pairing that gets the Taigo to 62mph in under 10secs, but remains soothing enough to lean into the excellent ride, which is softer than the more upmarket Audi Q2. Overall interior quality isn’t up with the best alternatives, with lots of hard-touch plastics present, but the Taigo does come with an 8in screen and a respectable suite of safety features. Considering how cheap it is to own, the Taigo is a winning formula.
Read our full Volkswagen Taigo review
Strengths
- Britain’s cheapest mini SUV to insure
- Low running costs
- Supple ride
Weaknesses
- Not as fun to drive as rivals
- Interior quality not the best
- Reliability isn’t great
Strengths
- Smart interior is packed with equipment
- Good ride and handling balance
- Practical boot
Weaknesses
- Tight for taller adults in the rear seats
- Slightly firm low-speed ride
- High boot loading lip
Cost of insurance £866
Version 1.0 TCe Techno | Insurance group 11E
The Skoda Fabia and Volkswagen Polo may be more than £150 cheaper to insure than the Clio, but its average premium still sits comfortably within the 10 cheapest in the UK. It also gets a bigger boot than both (391 litres), and boasts a well-packaged and generously kitted interior which includes a 7in digital driver’s display and parking sensors. Opting for the 1.0-litre TCe engine should return a handy 57.6mpg in mixed conditions too, so the Clio continues to be a leader in its class on all fronts.
Read our full Renault Clio review
Strengths
- Undercuts rivals for purchase price
- Ride and handling balance is superb
- One of the most spacious cars in its class
Weaknesses
- Some rivals are cheaper to insure
- Engines can be choppy at times
- Low-speed ride is firm
Strengths
- Punchy engines
- Plenty of standard kit
- Agile handling
Weaknesses
- Rivals have more flexible rear seats
- Firm ride
- Other small SUVs are more practical
Cost of insurance £889
Version 1.0 Pure | Insurance group 9E
The Stonic is one of the cheapest small SUVs around: it’ll cost £250 less to insure than a similarly-sized VW T-Roc, which is slightly more comfortable and quieter, but starts at over £7k more than our chosen spec. That being the Pure trim attached with a 1.0-litre three-cylinder engine, which is more economical (albeit slower) than the mild hybrid version. The Stonic is also really easy to drive, thanks to its perky dimensions and slim pillars, which make it the perfect city car for urban dwellers.
Read our full Kia Stonic review
Strengths
- Lower insurance group than most rivals
- Lots of kit from entry level
- Long warranty
Weaknesses
- Ride isn’t great
- Rivals are more practical
- Lots of cheap plastics inside
Strengths
- Great to drive
- Punchy engines
- User-friendly interior
Weaknesses
- Lots of road noise
- There are punchier rivals available
- Iffy reliability record
Cost of insurance £900
Version 1.0 TSI FR | Insurance group 12E
Spinning a car off the Volkswagen Polo is a good idea, as is proven by the Ibiza. It’s well-priced, spacious and handsome. We also think it’s superb to drive with confidence inspiring handling and a composed ride, factors that help it hold its own against our top-rated small hatchback, the Renault Clio. Our quote is for the 1.0-litre TSI 95 engine and SE Technology trim. We recommend this combo because it makes for a peppy hatch that’s frugal on fuel, and one that comes with plenty of nice-to-haves, including front parking sensors, a 9.2in infotainment screen and smartphone mirroring.
Read our full Seat Ibiza review
Strengths
- Fun to drive
- Sprightly performance
- User-friendly interior
Weaknesses
- Intrusive road noise
- Not as classy inside as some rivals
- Reliability a concern
FAQs
The price you'll pay for car insurance is primarily driven by two factors: you and the car you're insuring.
Your car will be assigned a car insurance group rating, which is a good barometer as to whether your premiums will be large or small. These are decided by the Association of British Insurers, and take into account a wide range of factors.
- Engine size and performance: Generally speaking, the faster a car, the more expensive it will be to insure. Traditionally, there was a close relationship between performance and engine size, however, today things are less clear-cut, because smaller engines can product huge performance thanks to breakthroughs in modern technology.
- Safety ratings and features: Euro NCAP is a body tasked with rating the safety of cars sold in Europe. In the most part, cars with a better safety score (four or five stars) will attract lower insurance premiums because they're less likely to be involved in accidents, and with lower damage or personal injury claims as a result. Features such as autonomous emergency braking (AEB) and other advanced driver assistance systems (ADAS) including lane-keeping aids and intelligent speed limiters deliver tangible safety benefits.
- Security features: Alarms and immobilisers are fitted to many cars from the factory, but the harder a car is to steal, the lower you can expect your premiums. You may be able to negotiate additional discounts by agreeing to use mechanical steering lock or by keeping your vehicle in a secure location.
- Repair costs: As cars become more complex, the cost of parts and repair becomes more expensive — and this is taken into account when car insurance groups, and the resulting premiums, are generated. Much of this equipment is designed to prevent accidents in the first place, but myriad sensors and other electronics can be costly if damaged.
These are (mostly) factors you can control by choosing the right car for you. However, your personal profile is harder to influence. Factors used to generate an insurance premium include:
- Your address
- Age
- Relationship status
- Whether you're a homeowner
- Your profession
- Length of time you've been driving
- Your driving history, in particular an driving licence endorsements or previous claims
There are a number of practical things you can do to drive down the cost of car insurance. These include:
- Certified driving courses: becoming a better driver — and gaining the qualifications — can help reduce your premiums. Advanced driver training courses, such as those offered by IAM RoadSmart (formerly the Institute of Advanced Motorists) are accepted by some car insurance providers and can help reduce your premiums.
- 'Black box' telematics policies: Such insurance schemes require a bit of hardware installed in your car, and can reward careful and skilful driving. They can significantly reduce premiums, but won't suit everyone. You can read more about black box insurance policies in our feature.
- Combine car insurance and home insurance: Taking out a joint home and car insurance cover can yield some healthy discounts in many cases, but you'll need to do your homework, because sometimes the reverse can be true. While it can also reduce time spent on household admin, it could make shopping around harder in the future.
- Opt for a higher insurance excess: If you need to make a claim, you'll need to pay an 'excess' fee. Increasing this can reduce your overall premium, although it may cost you more should you make a claim.
- Install an alarm: Many cars have an alarm fitted as standard, but if not, you can have an aftermarket security device installed. Just make sure you're not invalidating any warranties and anything fitted is insurance-approved and that the work is carried out by an approved installer.
- Park in a more secure location: Parking in a secure garage makes it harder for your car to be stolen or damaged, so premiums may be lower as a result. On the flip side, you may find premiums increase for cars parked on your driveway rather than the roadside, because potential thieves may find it easier to track the whereabouts of you, or your car keys — particularly if they're attempting a keyless theft.
- Shop around: Despite preferential pricing for new customers being banned, cover is still often more expensive if you stick with your current provider. Shop around and play one company off against the other to help reduce your premiums.
