Cheapest cars to insure for new drivers
Insurance is often the biggest single cost shock for new drivers, sometimes costing more per year than the car itself. The good news is that the car you choose has a huge effect on that cost. This guide covers how insurance groups work, what kinds of cars tend to be cheapest to insure, what else affects your premium as a new driver, and how to finance a low insurance group car once you have found one.
Insurers price risk based on data, and statistically, new and young drivers are involved in more accidents and make more claims than experienced drivers. This is reflected in higher premiums regardless of how careful an individual driver actually is. The lack of a personal claims history also means insurers cannot price based on your own track record yet, so they fall back on the wider statistics for your age group and experience level.
This does not mean nothing can be done about it. The car you choose, how you are insured, and a few other factors all have a significant effect on the premium you are quoted, often more than people expect.
Every car sold in the UK is placed into an insurance group, numbered from 1 to 50. Group 1 cars are the cheapest to insure and group 50 cars are the most expensive. The group is worked out based on a combination of factors including the car's value, performance, the cost of parts, repair times, and how likely the car is to be stolen.
For a new driver, the difference between a group 3 car and a group 20 car can be hundreds of pounds a year in premium, even if the cars are a similar age and price to buy. Checking the insurance group before buying a car, not after, is one of the simplest ways to control costs as a new driver.
| Insurance group | Typical car type | Why it is cheaper to insure |
| 1 to 8 | Small city cars and basic superminis with small engines | Lower value, cheaper parts, smaller engines, lower performance, generally cheaper and quicker to repair |
| 9 to 15 | Mainstream superminis and smaller hatchbacks with mid-size engines | Still modest performance and value, a common range for practical first cars |
| 16 to 25 | Larger hatchbacks, small SUVs, higher trim levels | Higher value and more equipment increases repair costs and theft risk |
| 26+ | Larger SUVs, performance models, premium brands | Higher value, performance, and repair costs push these well above what most new drivers want to pay |
Generally, the cars that are cheapest to insure as a new driver are small, have modest engine sizes, are not in high demand with thieves, and are cheap and straightforward to repair. This often overlaps neatly with cars that are also cheap to buy and run, which matters when you are financing the purchase too.
The car matters most, but several other factors also have a big effect on the premium you are quoted:
Voluntary excess. Agreeing to pay more toward a claim yourself can reduce the premium, but make sure the excess is an amount you could actually afford if you needed to claim.
Yes. Comprehensive insurance is a standard requirement under a hire purchase agreement, and it needs to be in place from the day you collect the car. You cannot drive a financed car away without valid insurance, so it is worth getting quotes for the specific car you are considering before you finalise your finance application, not after.
This is also a practical reason to check the insurance group early. If you are approved for finance on a car but the insurance premium turns out to be far higher than expected, your overall monthly outgoings, finance payment plus insurance, may end up being more than you budgeted for. Checking both together avoids that surprise.
For more on the insurance requirements under HP, see: You'll need comprehensive insurance.
When you are choosing your first car, it makes sense to think about the insurance group and the finance cost together rather than separately. A car that is slightly cheaper to buy but sits in a much higher insurance group could end up costing more overall once you add up the monthly finance payment and the insurance premium.
Our guide on the best second-hand cars to buy on finance breaks down what kind of car suits different budgets when financing a used car. Combining that with an insurance group check for any specific car you are considering gives you a much more realistic picture of what it will actually cost you each month.
Use our car finance calculator to work out the finance side, then get an insurance quote for the same car before deciding. Comparing the combined monthly cost across a few different cars often reveals options that are noticeably cheaper overall than the obvious first choice.
New drivers are often also first-time finance applicants. This does not need to be a barrier. AutoMoney Trust considers applications from people with poor credit.
Hire purchase finance is available from £4,000 to £25,000 over 36 to 84 months with no deposit required. The initial check is a soft search that will not affect your credit file. For more on what is involved in a first application, see our guide on how to apply for car finance, which covers the process for first-time applicants specifically.
Start your application on our apply for car finance page to check your eligibility before you start looking at cars.
Fully comprehensive insurance is required throughout your finance agreement with AutoMoney Trust, because the vehicle legally belongs to us until your final payment is made. Comprehensive cover protects both you and the lender against damage, theft, fire, and accidents, ensuring the asset is protected for the full term. It is typically more expensive than third party or third party fire and theft cover, so factor this into your monthly running costs when budgeting. Many drivers also consider GAP insurance, which covers the difference between an insurance write-off payout and the outstanding finance balance.
Your loan term directly affects both your monthly payments and the total cost of borrowing. A longer term, such as 60 or 84 months, spreads the cost over more payments, lowering the monthly amount but increasing the total interest you pay across the agreement. A shorter term, such as 24 or 36 months, means higher monthly payments but a lower overall cost. AutoMoney Trust offers terms from 24 to 84 months, so you can balance monthly affordability against total cost. Use our finance calculator to compare different term lengths before applying.
Car finance can affect your credit score in both directions. Consistent, on-time payments build a positive credit history and may improve your score over the life of the agreement, demonstrating to future lenders that you can manage credit responsibly. Missed or late payments have the opposite effect, they are reported to credit reference agencies and can lower your score, making future borrowing harder or more expensive. Applying for finance also creates a hard credit search, which may cause a small short-term dip. Settling your agreement in full further strengthens your credit profile. For more detail, read our guide to Credit Checks for Car Finance.
A fixed rate keeps your interest rate and monthly payments the same throughout your agreement, giving you predictable costs from start to finish. A variable rate can rise or fall during the term, usually tracking the Bank of England base rate or the lender's standard variable rate, which means your payments can go up or down. AutoMoney Trust offers fixed interest rates only, so you know exactly what you will pay each month. Fixed rates provide certainty but may start slightly higher than introductory variable rates; the trade-off is protection from future rate rises. For more detail, read our guide to What Is Car Finance APR?.
