Insurance Guzzles Savings From Fuel-Efficient Cars

Trading down to save money on gas results in higher premiums

By Jim O'Neill,  Newser User

Posted Oct 23, 2008 11:07 AM CDT

(Newser) – Think you’re saving money by driving that small, fuel-efficient car you traded in your SUV for? Maybe, but you’re probably paying more for your insurance—a lot more, reports the Wall Street Journal. In accidents, small cars tend to sustain more damage, and occupants more injures, than larger vehicles. Hence a Honda Civic, for example, incurs higher premiums than the company’s larger SUV CR-V.

A 40-year-old man would pay $438 more a year to insure a Mini Cooper than a Toyota Sienna Minivan—though the latter gets 14 fewer miles to the gallon on the highway. Insurance industry experts say not only is there a safety trade-off when choosing smaller, lighter vehicles, but small cars also are stolen more often. Hybrids, meanwhile, are even more expensive to insure because of higher repair costs.

The Honda CRV sport-utility vehicle is a better bet for insurers because passengers in the bigger, safer vehicles incur fewer injuries in accidents.   (AP Photo)
Sara Jean Underwood, Playboy's Playmate of the Year for 2007, poses next to a Mini Cooper she received at the Playboy Mansion in Los Angeles.   (AP Photo/Reed Saxon)
A Mini Cooper might get 37 mpg, but it costs $438 more to insure per year than a Toyota Sienna minivan getting 23 mpg, reports.   (AP Photo)
Honda CR-V compact SUVs sit on a lot in Jackson, Miss.   (AP Photo/Rogelio V. Solis, file)
A Honda Civic averages $412 more per year to insure than the company's CR-V, a small SUV, because smaller cars are involved in more accidents and incur higher claims--eating up savings on gas.   (AP Photo)
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