So a lot of people buy smaller cars for the increased mpg and gas cost savings, but apparently these smaller cars have higher insurance costs due to higher bodily injury costs, higher theft rates, and the fact that more small cars are used in street racing and such. What does this mean in terms of cost savings? You save on gas, but pay more for insurance! (from an article I read in today's paper)

For a 40 yr old male driver, the average price to insure a Honda Civic is $412 more per year than with a CR-V. The Civic gets 36 mpg hwy, the CR-V, 27. Assuming you drive them 10k mi a year and gas costs $3, the cost difference in gas is $278. So, you actually end up paying more per year for the higher mpg car - $412 for insurance - $278 for gas savings = $134 more you pay for that Civic.

Interesting huh?

Lets say you have a hybrid car, and insurance is higher than on a normal car - hybrids cost more to repair. The Camry hybrid costs the average 40 yr old male $1,957 to insure per year, the normal Camry is $1,302, about $650 less per year in addition to the initial cost savings in buying the less expensive car. The normal Camry gets 31 mpg hwy, the hybrid 34 mpg. The hybrid is $5k more than an SE model, your typical Camry.

At 10,000 mi per year, your gas savings are $82/yr with a hybrid Camry, but you paid $5k more for a base hybrid over a base SE, and your insurance is $650 more! You have to really love the environment to buy a hybrid Camry...

Heavier vehicles get lower mpg, but cost less to insure. Its an interesting argument for a larger vehicle for those looking to save money, not just save the environment.

 

Interesting perspective.

 

My insurance dropped significantly when I traded-in my 80,000 mile '01 Lexus IS300 for my new Yukon Denali. Go figure.

People just plain do not make good purchasing decisions for the vast majority of the population. That is one reason why our economy is in this big mess. Why do you think people would be any smarter considering the total cost of ownership when buying a car when the majority don't take basically anything into consideration when buying anything else, except their FEELINGS and EMOTIONS?

<on rant>Dumb/ignorant people are the majority of the population in our country. I think the first big educational change is to require basic financial planning classes in high school along with home/auto repair classes. Can you imagine how much people would save if they knew how to fix most things around the house and on their car? Then, having general understanding of finance would allow them to make smart purchase and saving decisions. <off rant>

 

i agree with the OP. i've always thought that hybrid cars have higher ownership costs. the only benefit of owning those, IMHO, is that they're more environmetally friendly, which is not a bad thing i suppose... you just have to fork out more $$$.

 

Now you know why wealth redistribution is so popular these days..

 

Interesting finding!

 

Good information but I don't see the point of full coverage on a economy car just used for transportation. Liability is pretty even across the board in my experience.

 

Dipsticks that can't hold onto any of the few dollars they make are demanding a hand out because it's "not fair."

 

because it sounds good to the masses. blame someone else! that is how you win elections

 

I pay less on my S2000 than I do on my heavier 800 pound heavier Outback.

I don't know that the OP's figures for one car hold true over the whole fleet of small cars. The Civic is one of the most stolen vehicles. Use a Hyundai or Kia or Focus and I don't know that the theory that small cars cost more than heavier ones holds up.

Rates also vary one cars from state to state depending on theft rates. A civic may have a high insurance rate in NY or Cali, but be cheaper in North Dakota.

I find it hard to believe that the civic cost $412 MORE than the CRV for a 40 year old male, when I am a 39 year old male and pay less than $700 for two cars, full coverage, low deductables on both. Not saying Saki has come up with bogus numbers, but rather that you can find an anomoly to prove a point that may not be universally true.