Even in the midst of a pandemic Americans are still driving. And according to the American Automobile Association, we collectively drive over 70 billion hours annually.
The typical American driver drives 50-minutes a day, half an hour daily, and about 11,500 miles annually.
Even with the economic upheaval caused by the pandemic Americans still need to drive. And they are finding cheaper ways to buy and finance cars.
As of January 2021, the average cost of a new car was $40,000. In the pandemic era, however, Americans are not buying new cars like they used to do before the pandemic.
The sales of new vehicles dropped by over 28% in May 2020 alone.
By June 2020, as the pandemic roared, used car dealerships sold over 1.2 million used vehicles, a 22% increase from the previous year. It was also the highest annual increase in used car sales since 2007.
In July 2020, the typical value of an average used car spiked by more than 16%.
The market for used cars exploded so much in June 2020 that CarMax, the #1 used car retailer in the United States, rehired the 15,500 employees that it laid off earlier in the year.
The point is that now that Americans are more budget-conscious than ever when it comes to car ownership, that financial mindset must also be applied to car insurance premiums.
The 5 cheapest cars to insure
According to data compiled by CarGurus, ValuePenguin, MoneyWise and several car insurance companies, you can pay affordable annual insurance rates on moderately priced cars.
For example, it would cost you about $2,900 to insure a car with a value between $25,000 to $30,000.
The same research also shows that the more expensive the car, the more expensive it would be to insure it.
If your car is worth $30,000 or more, it would cost at least $3,900 annually to insure it.
The five cheapest cars to insure are a mix of American and Japanese cars with a value between $20,000 to $26,000:
- Toyota RAV4 – $2,475
- Ford F-Series – $2,471
- Honda Odyssey – $2,457
- Chrysler Pacifica – $2,416
- Honda CR-V – $2,346
Make sure that you buy a used car from a reputable dealer and with the assistance of a friend who understands cars.
If you buy a lemon or a used car that will die shortly after purchase, the costs you save on car insurance will be negated.