There are a lot of things that run through a consumer's mind when purchasing a car. Recently we've gone over some of those varying points, including vehicle safety, resale value, and fuel efficiency. Today, however, we're going to turn our attention to another aspect of the car-buying process that directly affects our pocketbooks: car insurance.
I don't know about you, but even saying "car insurance" makes me cringe. We are legally required to have car insurance if we drive in the U.S., but I can't think of many drivers who are willingly happy to pay car insurance premiums.
What's really interesting about auto insurance is that rates on one vehicle can drastically vary from rates on a similar vehicles for a number of reasons. Obviously a person's age, gender, and driving record can affect car insurance rates, but other factors such as a vehicle's propensity to be stolen or driven aggressively come into play too.
"Why should I care about auto insurance rates," you ask? Because lower rates could mean more disposable money in your pocket, which you can use to purchase other goods or invest in your future! Vehicles that garner lower insurance rates also have the potential to be targeted more by consumers on a budget or families, since they're typically deemed to be safer.
The 20 cheapest cars to insure
Luckily for us, research website Insure.com understands this all too well and has once again compiled its annual ranking of the most and least expensive cars to insure for 2014. Insure.com's analysis covers more than 850 models, so there's no cherry-picking here, and it averages annual insurance rates across six national insurance carriers utilizing 10 ZIP codes per state.
Since I'd venture a guess that the majority of you would prefer to save money on your auto insurance, let's have a closer look at Insure.com's 20 least expensive cars to insure for 2014 and see what brands stood at the head of the class. The real surprise is in what auto brand absolutely dominated this list.
So how many of you out there guessed that Jeep would claim the top spot and seven of the top 20 spots for least expensive average annual auto insurance rates?
On the surface you'd expect Jeep, which is owned by Chrysler Group and is itself a subsidiary of Fiat (NASDAQOTH:FIATY), to be this rugged adventurer's vehicle that would command moderate to high insurance rates because of the prospect of damage from being taken off-road. In fact, most Jeep ads show their vehicles being taken off-road, and it's one of the main reasons the Wrangler currently sits at No. 3 on the list of vehicles with the best resale value after five years. However, as both senior auto analyst Karl Brauer of Kelley Blue Book and auto editor of Edmunds.com Mark Takahashi told Insure, Jeep's have been turned into something of a family vehicle. Brauer notes specifically that Jeeps tend to be driven by "single or married women under age 45, who display prudent driving behavior."
Making the case further for Jeep, it also ranks as a brand that's typically under the radar for thieves. In fact, according to data from the Highway Data Loss Institute last year, the Jeep Compass ranks among the top 10 least-stolen cars in America, with just 0.5 thefts per 1,000 vehicles insured.
Finally, as Joe Wiesenfelder, executive editor of Cars.com, told Insure.com, the simple fact that SUVs have a higher base than sedans often means less damage in a collision. Being easier to fix and having less damage is music to an insurance company's ears. What it means for Jeep and ultimately Fiat is the possibility of using its low auto insurance rates to appeal to families and female drivers in an effort to potentially boost sales.
Honda makes a strong bid for cost-conscious consumers
But it wasn't just Jeep cleaning up. Honda Motor (NYSE:HMC) also had a respectable showing, with four vehicles in the top 20. With the exception of the Subaru Outback 2.5i, the Honda Accord Sport was the only other sedan to edge its way onto a list dominated by SUVs and minivans. Honda had two minivans with its Odyssey EX and LX, as well as its smaller SUV the CR-V LX.
There were a number of factors that helped push Honda toward the top of this list. First, minivans aren't purchased for racing your best friend down the highway -- they're a family car, and statistically speaking, parents hauling around their kids tend to drive a bit safer. Clearly, Honda is doing something right in this market, as Odyssey sales have increased by nearly 29% since 2009.
Secondly, Honda's CR-V ranked also ranked among the top 10 least-stolen vehicles by the Highway Data Loss Institute, pushing it up the list of cheapest vehicles to insure. Compared with the Odyssey, sales of the CR-V (all models) have taken off like a rocket since the recession, moving from 191,214 units in 2009 to nearly 304,000 last year.
Finally, you have the economic and cost-conscious nature of the average Honda purchaser. Most buyers are looking for a reliable and safe vehicle that will get them from point A to B for a reasonable price and nothing more. Looking at this from the perspective of an auto insurer, there just isn't a lot of risk built into Honda's product line, and its cheaper insurance rates for the aforementioned four models certainly adds reasoning for consumers to gravitate toward the brand.
No Dodge-ing this
The only other auto brand to appear more than once on the list of cheapest cars to insure was Dodge, which is also under the Chrysler Group and Fiat umbrella.
The two Dodge vehicles featured on the list are its Grand Caravan SE minivan and its Journey SE, which is a midsized crossover. Similar to the Odyssey from Honda, the Grand Caravan works its way onto the list because it's a vehicle purchased by families unlikely to drive it recklessly. You'll notice that the growing trend among auto insurers is they're loving minivans and small SUVs because, in general, families and responsible individuals seem to be purchasing them.
For the Dodge Journey SE, it has a lot to do with its low theft rates, which once again rank among the lowest 10 in the country at just 0.4 thefts per 1,000 vehicles insured. However, just because the Journey ranks low on thieves' radars doesn't mean its sales aren't climbing. Its combined North America sales (all models, not just the SE, considered) have jumped from roughly 59,000 units in 2008, when it was fully introduced, to more than 110,000 units last year.
Success at Dodge is going to be critical to Chrysler Group's ongoing turnaround, and the steady improvement in sales of the Journey is a good sign.
How the manufacturers stacked up
In total, Fiat and Chrysler Group absolutely cleaned up when it comes to enticing the cost-conscious consumer with 10 of the top 20 spots (seven from Jeep, two from Dodge, and one from Chrysler). I would be shocked if it wasn't able to capitalize on this dominance to help drive sales with cost-savvy shoppers. The same can also be said for Honda, which builds upon its reliance and durability with extremely low insurance rates for some of its vehicles.
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Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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