Looking for a practical car that doesn’t cost the Earth to insure? These vehicles are found in low insurance groups and will help you control costs in 2025.
Whether you are a young driver or you simply want to cut costs, getting cheap insurance is critical.
In this article we’ll look at 10 cars in the lowest insurance groups.
But first, you may want to consider: is it better to lease or buy a car?
For those beginning their motoring life in 2025, managing costs is a priority.
Fuel prices remain a significant cost, although they have come down from the highs of 2022.
Additionally, buying a new car in the first place comes with a hefty price tag, rising 40% over the last 10 years.
With this in mind, buying a second hand small car will be an attractive option for new drivers.
However, whether you’re buying new or used, it's important to consider which insurance category your car falls into, since this will directly impact your insurance premium.
Average year-on-year insurance costs rose by 43% in 2024, to a substantial £941, although costs have dropped off slightly over the last 12 months, to about £834.
Cheap insurance: Which car should I buy?
There are a number of smaller cars that cost less to insure. These usually have an insurance category of 1 to 5 - on a scale that rises to 50.
The higher the category number, the more expensive a vehicle is to repair or replace (such as a supercar).
Cars in lower insurance categories do tend to be somewhat lethargic due to their smaller engines, but they are more than sufficient for urban driving. However, they may not be best suited to regular motorway journeys.
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Here are 10 surprisingly cheap cars to insure in the UK in 2025.
Skoda Fabia
Annual insurance £237.94
List price £19,410
The Skoda Fabia is one of the most reliable and rewarding hatchbacks on the market - and it’s also very cheap to insure (relatively speaking).
The new version of the Fabia is just as spacious as former incarnations, and is much more affordable than comparable vehicles such as the Seat Ibiza and the Volkswagen Polo.
Indeed, many car journalists argue that the Fabia actually offers a better ride than more premium offerings - from the VW stable and others.
Seat Ibiza
Annual insurance premium £240.84
List price £19,795
The Ibiza has been around for six years, and is still a great choice for those seeking a responsive, powerful engine, and a nicely finished interior. It also presents a truly comfortable ride and remains one of the most stylish vehicles in the segment.
As well as being a rewarding, modern car, it’s also one of the cheapest to insure.
Dacia Sandero
Annual insurance £240.36
List price £13,250
Cars priced below the £15,000 mark are a rare thing, but Romania’s Dacia continues to manage it - with its Sandero model. Parent company Renault has maintained most production in the eastern European country, which has helped keep down manufacturing costs. Yet despite the low price tag, it’s no slouch on the equipment front, offering everything you would need.
Early versions of the Sandero were attractive chiefly for their low price, but now, after years of refinement, it’s actually a great car in its own right.
As well as being cheap to buy, it's also one of the cheapest cars to insure.
Volkswagen Polo
Annual insurance £247.44
List price £21,210
It’s not easy to find a car that marries comfort and refinement with an approachable price, but that’s what you get with the 1.0-litre MPI petrol engine variant of the Polo. It won’t exactly delight those with a penchant for turbos, but it does deliver a sizable saving on insurance (particularly compared to the beefier TSI models).
It may not be the most charming car ever produced, but it ticks the ‘dependability’ box - and puts more money in your pocket.
Volkswagen T-Cross
Annual insurance £248.24
List price £24,895
Hyundai i10
Annual insurance £259.91
List price £16,380
However, in order to benefit from the lowest-possible insurance, you’ll need to opt for the 66bhp three-cylinder engine. It won’t do much on the Nürburgring, but it’s fine for the daily urban commute.
Kia Picanto
Annual insurance £250.35
List price £18,945
The 255-litre boot is more than enough for most, although in seats-down configuration, it’s not as generous as the Dacia Sandero or the Aygo X.
Kia Stonic
Annual insurance £260.56
List price £20,265
In insurance terms, it’s a great option - with a similar premium to the other Kia on this list.
Hyundai i20
Annual insurance £282.61
List price £20,880
For those of a budget, any lack of sportiness or comfort will be lessened by the very affordable insurance.
Toyota Aygo X
Annual insurance £307.13
List price £16,515
The base Advance trim model of the Aygo X, with its 1.0-litre engine, is an alluring option for those seeking to keep insurance costs down. And despite being an entry-level variant, it still offers excellent ergonomics, and a level of road noise comparable to chief rivals.
The modest 71bhp three-cylinder engine is a little uninspiring, but more than does the job as a city runabout.
Honourable mentions
Many other cars land in low insurance categories – especially in the used market. Here is a selection of other cheap-to-insure cars.
|
Car Model |
Typical Insurance Group |
Notes |
|
Citroën C1 |
1 – 3 |
Older but still very cheap in low trims; shares parts with Peugeot 108. |
|
Peugeot 108 |
1 – 3 |
Sister car to the C1 - excellent for new drivers. |
|
Ford Ka+ |
1 – 3 |
Very basic spec but keeps insurance low. |
|
Fiat Panda |
1 – 4 |
Frequently cited as cheapest overall to insure. |
|
Skoda Citigo / SEAT Mii |
1 – 4 |
VW Up! family cars; excellent value and cheap premiums. |
|
Vauxhall Corsa |
2 – 6 |
Popular first car; newer models slightly higher insurance groups. |
|
Nissan Micra |
1 – 7 |
Larger than i10/Picanto but still in a low group in entry trims. |
Cheap car insurance for bad credit
Due to the economic challenges experienced by many in the past few years, and exacerbated by the cost-of-living crisis, those seeking cheap car insurance with bad credit are not alone.
Because offering insurance is not unlike a loan, insurers may carry out a credit check before calculating your premium.
If you’re in this position, a number of routes are available.
You can choose to pay your entire year’s premium in one go, trim your cover, and/or look for smaller or non-standard providers, but always be sure to read online reviews for any insurance provider so you can make an informed decision.
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