Car insurance is one of the biggest contributors to the cost of living crisis. Data from comparison site Disrupt shows that the average premium has risen by £284 (43%) in the last 12 months to a whopping £941.
Fortunately, there is still a wide range of cars available that are significantly cheaper, as our guide to the cheapest new cars to insure shows.
Each listing is based on a 35-year-old man who lives in Swindon and works as a teacher. He drives to work by car, parks his car on the street during the day and in a residential area at night, and drives 8,000 miles a year. He has no penalty points on his driving licence and has been given full payment for his 18 years of non-declaration bonuses.
Although insurance premiums have risen significantly across the board over the past year, good news is on the way. The cost of insuring every car in our dataset has fallen since the rankings were last adjusted in November 2023, meaning significant savings are possible. If you own a new Fiat Panda, Toyota Aygo X, Hyundai i10 or Volkswagen Polo, your insurance premiums are now over £100 cheaper than they were eight months ago.
Top 10 cheapest new cars to insure in the UK
1. Fiat Panda 1.0 Mild Hybrid
Annual premium £337.66 Saving vs November 2023 £137.11 List price £14,775
The cheapest new car in the UK is the venerable Fiat Panda. If you’re just looking for a basic car that’s cheap to buy and maintain, it’s a great option. But it doesn’t even come close to the standards of newer rivals like the Hyundai i10.
2. Manual Toyota Aygo X 1.0 VVT-i Pure
Annual premium for insurance: £366.24; savings vs. November 2023’s £114.08 list price of £16,140
The Toyota Aygo X is a reliable city car with a fun cabin, excellent handling, and a high-tech chassis. Considering its small stature, it is somewhat pricey, and the three-pot engine’s 71 horsepower is almost a bit sluggish.
3. Hyundai i10 1.0 Advance (Automatic)
Annual premium £387.78 Saving vs November 2023 £122.40 List price £16,030
This is one of the best new city cars you can buy, thanks to confident handling and a spacious interior with more technology than many of its competitors. But to keep insurance costs down, you’ll unfortunately need to opt for the 66hp three-cylinder engine.
4. Kia Stonic 1.0 T-GDi 2
The Kia Stonic stands out in a crowded class with strong equipment and good handling, and it’s significantly cheaper than many of its rivals. But it doesn’t ride very well at low speeds, and the quality of interior materials doesn’t keep up with its rivals.
5. Seat Arona 1.0 TSI 95 SE (Manual)
Annual premium £449.18 Saving vs November 2023 £80.73 List price £22,460
This is a former class leader and still a solid option if you’re looking for a trendy crossover. The interior has a modern look and feel, but the entry-level SE model only has an 8.25-inch infotainment touchscreen. You might consider stepping up to the SE Tech, which increases the screen size to 9.0 inches and adds a navigation system and rear parking sensors without increasing insurance costs.
6. Fiat 500 1.0 Mild Hybrid (Manual)
Annual premium £460.78 Saving vs November 2023 £60.46 List price £16,800
Effectively a Panda in a fashionable dress, it comes in the same four-seater layout and the same 1.0-litre mild-hybrid petrol engine. It’s great fun to drive around town, thanks to the light steering and good engine revs. However, the ride is bumpy, the cabin is cramped and the car isn’t particularly refined, so it’s not the best choice for long-distance trips. It’s due to be replaced by a new model based on the 500e in 2026.
7. Seat Ateca 1.0 TSI 115 SE Technology
Annual premium £466.07 Saving vs November 2023 £47.64 List price £29,260
This family SUV was revolutionary when it was launched but has lost its lustre over the years. The engine can be a little rough and the ride quality isn’t very good on the 19-inch wheels fitted to the top models. Instead, go for one of the entry-level versions with smaller wheels and save on both the price of the car and insurance costs.
8. Seat Ibiza 1.0 TSI 95 SE (Manual)
Annual premium £473.86 Save £91.31 compared to November 2023 List price £19,275
A well-crafted interior, an appealing turbo engine and a well-balanced chassis. The steering is too light, but that’s the Ibiza’s only major failing.
9. Kia Picanto 1.0 2 (Automatic)
Annual premium £476.87 Saving vs November 2023 £50.64 List price £16,295
The Picanto’s latest facelift addresses its main weaknesses: interior quality and technology. They haven’t yet driven the new version, but the previous model was comfortable, had an agility rarely found in such an affordable car, and was surprisingly fun on the road. However, due to the low insurance group, they would recommend not choosing an automatic transmission here; changing gears can be sluggish and can ruin the driving experience. Only time will tell if the new thing represents an improvement.
10. Volkswagen Polo 1.0 MPI Life
Annual premium £497.21 Saving vs November 2023 £115.32 List price £20,975
If you want the elegance and comfort of a “big car” in a more affordable package, the Polo is the way to go. A good choice. The 1.0-litre MPI engine featured here isn’t turbocharged, so it can feel a little underpowered, but at least it offers significant savings in insurance costs compared to the turbocharged TSI unit.
