It’s sad to see that the days of the sub-$30,000 new car market are nearly over, with only a few brands like Kia, Hyundai, Mazda, MG, Chery and GWM vying for the title of Australia’s most affordable new vehicle.
While you can attribute the price rise to Australian consumers shifting their preference towards SUVs over the past couple of years, the current economic climate has placed financial pressure on a majority of drivers, with some looking to cut costs where possible.
Generally speaking, ownership fees like car insurance are typically one of the most common forms of cost-cutting measures drivers evaluate annually, with insurers constantly looking to get a leg up over their competitors.
But what are the cheapest cars to insure in 2025? To find out, Drive reached out to various insurers and industry bodies. Here’s what they said.
Disclaimer: The prices listed in this story are an estimation only. All insurers quoted in this story said insurance premiums are dependent on a range of factors such as a driver's history, the make and model of the car, and the availability of labour and spare parts.
What's the cheapest car to insure?
Generally speaking, some of Australia’s most popular sedans and hatches are the cheapest cars to insure in 2025.
According to a spokesperson for Compare the Market – an online insurance comparison website – “some of the country’s more common car models – such as the Toyota Corolla, Toyota Camry and Mazda 3 – are well known on our roads, but a lesser-known advantage is that they could sometimes be cheaper to insure as well”.
While insurance policies are dependent on the make and model of the car as well as a driver’s history, a Compare the Market spokesperson told Drive, “Vehicles with a good track record of being safe on our roads with lower repair costs will likely see cheaper quoted insurance premiums”.
Additionally, the sheer volume of cars like the Toyota Corolla and its Camry sibling on local roads also contributes to the models’ budget-friendly insurance coverage.
“Manufacturers that have established a healthy local supply chain of parts, or just have more parts because there are more cars on the road, can see lower car insurance premiums,” a Compare the Market spokesperson explained.
Besides high-volume models, data supplied by Youi Insurance and seen by Drive revealed a different story, with a combination of sports cars, pint-sized hatches and small SUVs ranking among the cheapest to insure.
As of July 2025, the Mazda MX-5 was surprisingly the cheapest car to insure according to Youi's data, with the car's insurance premium ranging from $581 to $1189.
The Kia Picanto was the second-cheapest model to insure, with its annual insurance coverage estimated to cost anywhere from $640 to $1402 under Youi's policies.
Meanwhile, the Toyota Yaris – the Japanese marque’s smallest model in Australia – ranked third according to the insurer, with the small city hatch's insurance policies ranging from $643 to $1375.
Additionally, Youi Insurance's data revealed that Suzuki's small SUV, the Ignis, was the fourth-cheapest car to insure in Australia, with its insurance premiums costing drivers anywhere from $647 to $1292.
Rounding out the fifth spot is the Hyundai i20 hatch, which typically commands an insurance policy ranging from $650 to $1463, as per Youi Insurance.
A Youi Insurance spokesperson told Drive, “Generally speaking, these vehicles are popular models, with readily available and affordable replacement parts”.
“Other factors that may contribute to lower insurance premiums include lower repair costs, smaller engine sizes, and a lower purchase price point.
“Beyond car model and the value of your vehicle, insurance quotes will also factor in details such as the driver’s age, driving record, insurance history, where you live and where the car is normally parked. Even the colour of your vehicle may impact your insurance premium,” they explained.
How can I lower my car insurance premium?
Besides owning a relatively cheap-to-insure car like the ones listed above, it pays to keep a clean driving record, as this could positively impact your next insurance coverage.
While it's not guaranteed, Marni Jackson, Youi Insurance's head of product, previously told Drive, “Youi rewards drivers with a good track record, taking into consideration things like demerit points and claims history”.
Unfortunately, loyalty does not equate to benefits in the insurance industry, and it pays to do your due diligence by researching other insurers' rates to find the one that works for your circumstances.
“We encourage all Australian motorists to shop around for car insurance. We often find price differences in the hundreds, or even thousands, between different providers for insurance products,” a Compare the Market spokesperson told Drive.
Changing your payment schedule and/or switching your excess and listed driver policies could also save you money in the long run.
A spokesperson for the insurance comparison organisation advised, “Paying annually instead of monthly, increasing your excess, and setting appropriate driver age limits are other levers savvy motorists can use to help keep insurance premiums affordable”.
A Youi Insurance spokesperson said that adding a “high-risk driver” – such as a younger motorist or drivers with a history of car claims – to your insurance policy “may increase your premium”.
However, it's worth checking whether an unlisted driver's excess applies at the time of an incident, and how much that excess rate is.
Additionally, the spokesperson advised, “Assess if your policy has an agreed value or market value coverage; you may find that market value has a lower premium.
“[Look at what] extras you need, such as hire car after an accident, reduced windscreen excess, or additional cover for any car accessories or modifications.”
Ethan Cardinal graduated with a Journalism degree in 2020 from La Trobe University and has been working in the fashion industry as a freelance writer prior to joining Drive in 2023. Ethan greatly enjoys investigating and reporting on the cross sections between automotive, lifestyle and culture. Ethan relishes the opportunity to explore how deep cars are intertwined within different industries and how they could affect both casual readers and car enthusiasts.
