Cheap Car Insurance for Low Value Cars UK

Car Insurance Guides
October 28th, 2025
Cheap Car Insurance for Low Value Cars UK

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How does the value of my car impact the cost of insurance?

The value of your car can affect the price you pay for car insurance. The cost of car insurance is not only based on how risky you are as a driver. It also depends on the market value of your car. This helps make sure your insurance covers the right amount if something happens.

Insurers look at the car’s replacement cost to decide how much they might pay you for a claim. If your car is stolen or gets damaged so much that it cannot be fixed, they will pay you what the market value of your car is at that time. Because of this, the cars that have a higher market value or cost a lot to repair often have higher insurance premiums.

Low value cars and older cars usually cost less to insure. But this does not happen all the time. A car’s insurance group rating is important. The way it is fixed and its security features also matter a lot.

For example, the Renault Clio and Ford Fiesta are both small hatchbacks. They are in a lower insurance group. This means it can cost less to insure them than it would for a new car that is more powerful and sits in a higher group.

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What are the cheapest cars to insure if my car is low value?

Insurance costs are not the same for every car. The cheapest cars for insurance are small cars that do not have strong engines. These cars also cost less to fix.

Car Type

Example Models

Typical Annual Premium Range (2025)
Small Hatchback Renault Clio, Vauxhall Corsa £550–£800
City Car Hyundai i10, Toyota Aygo £520–£780
Compact Hybrid Toyota Yaris Hybrid £650–£900
Older Used Cars Ford Focus (2014–2016) £600–£850

Cars in lower insurance groups often come with smaller engines. The repair costs are also lower for these cars, and there are fewer claims made for them. Vehicles that have basic things like a manual gearbox, a petrol engine, or a mild hybrid system are usually less expensive to insure. This is because they don’t have lots of high-tech parts or costly electronics.

Is it cheaper to insure a used car compared to a new low value car?

Yes, in most cases, used cars be less costly to insure than new cars that are the same type. This is because:

  • Used cars have a lower market value. This means it will cost less to pay out if you claim.
  • Parts for older cars are often cheaper to find. They are not as hard to repair as parts for new cars.
  • Insurers see used cars as less tempting for thieves than new cars.

A new low value car, like a new Dacia Sandero, can be cheaper to insure than a 10-year-old car that has lots of power but weak safety features, or needs pricey spare parts. The type of car, how old it is, and the insurance group work together to set the cost.

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Where can I compare car insurance quotes for low value vehicles?

The easiest way to get good deals is to compare car insurance from different insurance companies. You can use an online comparison site. This helps you see prices for comprehensive insurance, third party, fire and theft, and other types of policies.

When you look at quotes, be sure to put in the right details. This helps you get the best results.

  • You need to give your registration number and say the type of car.
  • Say if it is a new car or a used vehicle.
  • Give your yearly miles. Cars with fewer miles on them usually have a lower cost for insurance.
  • Tell them where you park your car, like in a driveway, on the street, or in a garage.
  • Let them know if you want any optional extras, like breakdown cover or a courtesy car.

Looking at policies side by side lets people find out which insurance providers give the best value for low market value vehicles.

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Are there specific insurance policies for cars with low market value?

Yes, there are some standard policies for cars that are worth less money. You can also find special plans for these vehicles.

  • Third party only – this is the legal minimum cover for car insurance. It protects other people, not your car.
  • Third party, fire & theft – this one gives some cover for older cars. It helps if your car gets stolen or in a fire.
  • Comprehensive insurance – this type covers you for an accident, fire, and theft. You can often get a good deal, even for a cheaper car.
  • Black box insurance – great for a young driver or a safe driver who wants to show good driving and get a claim discount.
  • Temporary car insurance – gives you cover for a car that you use now and then, or if you have the car for a short time between sales.

If your car has a market value below £10,000, it is still a good idea to get comprehensive cover. The cover will help pay for damage repairs, even if the value of your car is not high.

What should I consider when choosing car insurance for a cheap car?

When you buy insurance for a low value car, it is good to look at how useful it is, not just the price. There are some key things to think about:

  1. Level of cover – The cheapest option is not always third party. A comprehensive policy could be better value for a small car.
  2. Compulsory excess – It is important to know how much you will have to pay if you make a claim. A cheap policy may come with a high excess.
  3. Optional extras – Things like breakdown cover or legal help can raise the cost. They might save you money later on.
  4. Gap insurance – If you bought your car recently, gap insurance protects if the car is written off and the market value drops fast.
  5. Security features – Having alarms, immobilisers, and trackers on your car can lower theft risk. They can make your premium less.
  6. Mileage and usage – If you drive fewer miles, your cover should cost less. For those who drive now and then, look at a limited-mileage policy.

You need to read the terms of use every time before you decide. This will help you see what limits there might be. It also lets you be sure your policy matches how you use your car.

What should I consider when choosing car insurance for a cheap car

Does having a low value car mean my insurance premium will always be lower?

Not always. Car value is a key factor in this. However, the cost of your premium is based on a number of other factors too.

  • Your driving test history and what experience you have matter.
  • The place where the vehicle stays at night is important.
  • The type of policy you pick and the cover level you want can affect things.
  • It also depends if you are a new customer or you are just renewing your current policy.
  • The main driver’s age and any claim record they might have will be considered.
  • If the car is in a higher insurance group or if there is a lack of safety features, it can impact your costs.

For example, the cost to insure a classic car can be high. This can happen even if the car is not worth a lot of money. The reason is that it may need special parts and skilled people to fix it.

In the same way, a used car that is cheap but has a strong engine can end up in a higher insurance group. This will make its insurance price go up.

Are there any common exclusions in policies for low value cars?

Most car insurance plans for cars that are not worth much do not cover:

  • Wear and tear or mechanical failure
  • Depreciation or loss of value over time
  • Modifications not declared to the insurer
  • Using the car for business without the correct class of use
  • Claims arising from neglecting maintenance
  • Damage from racing or track use

Some insurers might not cover cars that are very old or ones that do not meet road safety rules. You should read the terms of use of your policy well before you buy it.

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Is mileage or age more important than car value when calculating insurance costs?

Both are important. But things like mileage and driver age can have more impact on the insurance price than what your car is worth.

  • Mileage – If you drive fewer miles in a year, your car will usually cost less to insure. The more you drive, the higher your risk is to have an accident.
  • Driver age – Insurance companies see younger drivers as higher risk. It does not matter what the car value is.
  • Car value – A higher car value means you could get more money if the car is lost or damaged badly. It also means the base price for insurance will be higher.

Insurers put together the details you give them, like your location and how you drive. They use this information to see what your risk is. This helps them decide your price for coverage.

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FAQs about cheap car insurance for low value cars

How does the value of my car impact the cost of insurance?

The value of your car can change the cost of car insurance. If your car costs more, then your insurer might have to pay more money when you lose your car or it is taken away. A car with a high price makes the insurance cost go up. This is because the payout might be bigger, so you pay a higher premium.

Low value cars often get cheaper insurance quotes. This is because the cost to fix or replace them is lower. But this is not always true. Some cars have fewer security features, rare parts, or are in more accidents. They may still go into a higher insurance group.

When you get insurance at the start of the policy, the company looks at the car’s market value. They also check the type, size of the engine, and security features. If you have an older car or one that is less powerful, the company sees less risk. They usually give you a lower yearly payment.

What are the cheapest cars to insure in the UK?

The cheapest cars to insure often have a small petrol engine, good safety features, and do not cost a lot to fix. Some common choices are the Renault Clio, Toyota Aygo, and Hyundai i10. These cars are in lower insurance groups, like groups 1 to 5. This is because the parts are cheap and they are not very fast.

Other good choices for young drivers or for people who want low insurance costs are the Kia Picanto, Vauxhall Corsa, and Skoda Citigo. You can find these cars on the used market. They are easy to look after, and if there is a small accident, it will not cost much to fix them.

When you look at quotes, you want to look at the standard versions of these cars. Do not pick sport trims or turbocharged models. Upgrades like those put the cars into higher insurance groups. This will raise the insurance price.

Is it cheaper to insure a used car or a new low value car?

In most cases, a used car costs less to insure than a new one. This is because the value of your vehicle is lower when you buy it used. If there is an accident and you have to make a claim, the insurer will pay less as your car is not worth as much as a new model. The value of your vehicle also goes down each year, so it keeps costing less to cover.

Sometimes, this may not be true for every car. A new car that has lane-assist or adaptive cruise control could be cheaper to insure than an older car that does not have these features. The Association of British Insurers says that things like a car’s safety rating, how easy it is to repair, and how often it is stolen help decide insurance costs.

If the value of your car is below £10,000 and it is safe, you may get lower car insurance costs. Many insurance providers will see it as low risk. Your car insurance can be cheap with these points.

Where can I compare car insurance quotes for low value vehicles?

The best way to get a cheap car insurance plan is to compare car insurance quotes from many insurance companies at once. A site like Free Price Compare lets you see the cost for different types of cover, like third party or comprehensive insurance. You can also pick optional extras, such as breakdown cover or having a courtesy car with your policy.

When you ask for quotes, always include right details like your registration number, the miles on your car, type of car, and if it is a new car or a used one. Insurers look at all of this to set the cost of your premium. It is a good idea to compare at renewal. Do not just let your current policy renew. This could help you save hundreds of pounds every year.

Are there specific insurance policies for cars with low market value?

Yes. Many companies offer standard policies that are made for cars with low market value or older cars. These give the same main cover that you get in other plans. But the price is set to fit cars that do not cost much in the market.

Options include third party, fire & theft. This one pays for damage you cause to others, plus theft of your own car. There is comprehensive insurance, which helps both you and other people if there is an accident. You can also get black box insurance. A box in your car will track how you drive.

Some providers give you temporary car insurance. You can get this kind of cover if you are selling your car or your car is used only for part of the year. Even if your car is worth less than £5,000, you should still think about getting comprehensive car insurance. It can help with accident repairs. You can also get optional extras. These can cover things like glass and windscreen damage.

What should I consider when choosing insurance for a cheap car?

When you get car insurance for a low value vehicle, don’t just look at the price. You need to check the level of cover the company gives you. Also, see what your compulsory excess will be. Find out if the insurer protects your claim bonus.

You should also examine:

  • Breakdown cover choices can help if you drive an older car that may not work well all the time.
  • Security features such as immobilisers or alarms keep your car safe, and can lower theft chances.
  • Gap insurance is a good idea for newer cars that are not worth a lot, since they can lose value fast.
  • Main driver must be true. You should always put the right person down as the main driver so the cover will stay valid.

A team of experts at the insurer you pick can help you find out which type of policy works best for you. A low price is not always the right choice. You should think about both the cost and the coverage that you get. This will help you feel sure and have peace of mind.

Does having a low value car mean my premium will always be lower?

It is not always true that cheap cars have low insurance costs. The cost of your premium is set by a number of other factors. These factors include your age, your driving history, where you live, how much you drive, and the insurance group rating of your car.

For example, the car that costs less but has a strong, turbocharged engine may be in a higher insurance group than a family hatchback that is safer but costs more. A classic car or one that is not made here can cost a lot to cover, because it can be hard to find its parts and the repairs need a specialist.

Your insurance price changes based on the type you pick. You might choose comprehensive insurance, third party, or third party, fire & theft. A low price for buying something does not always mean you get cheap insurance.

Are there any common exclusions for low value cars?

Yes. Policies made for low-value cars come with exclusions like other motor insurance products. Some common things that are not covered include:

  • Damage that comes from normal wear and tear or when a machine part stops working
  • Not doing the needed maintenance or missing service times
  • Using the car for a different reason than agreed, like business, without saying so
  • Changes to the car that the insurer was not told about
  • If the car gets stolen because it was left unlocked or not secure

Some standard policies do not cover classic cars or very old cars that have limited safety systems. Always read your insurer’s terms of use with care. You should check what is covered before the start of the policy.

Is mileage or age more important than car value?

Insurers look at mileage, age, and car value when they set prices. But each driver gets a different balance. If you are new and drive more miles in a year, you will pay more for car insurance. This is true even if you have a cheaper car.

Cars that go fewer miles every year usually have lower insurance costs. This is because they are not on the road as much and may get into fewer accidents. The age of the car also matters. Older cars may cost less for parts if they need repairs. But these cars often do not have new safety features, so people may think they are more risky.

Insurers look at these details and also at your driving history, claim discount, and past insurer data to figure out your risk score. If you keep a clean record, pick a safe driver telematics or black box policy, and store your car in a safe spot, you can make the overall price lower.

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Correct as of 22 October 2025

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