Cheap Car Insurance: Why UK Drivers Choose Cars Under £10k

In the UK, more people now choose to insure cars that cost less than £10,000. This is happening because of how much things cost right now, what is going on with used-car sales, and how people feel about buying a new car or a used car. But what does all of this mean for car insurance, the price people pay, the level of cover they get, and the risks they might face? In this article, we take a look at the data and the facts. We also show how owning a car with a lower price can change things depending on, for example, your driving experience, the cover you pick, and if you include any optional extras with your policy.

What’s going on in the UK used-car market?

Demand is rising for sub-£10,000 vehicles

• The UK used car market has seen more cars selling for less than £10,000.
• In 2025, the UK sold almost two million used cars during the spring. This was one of the best times since 2021.
• Market data shows there be lots of cars listed in the £0–£10,000 range. This shows that many people feel pressure to find affordable options.
• Sales of used cars go above new car registrations by three times or more. This shows how important the price under £10,000 is for most UK drivers.

Many drivers feel that a car under £10,000 gives them more value. A new car may cost more to insure and to finance. The risk of the car losing value is also lower with a cheaper car. Because of this, people often pick these cars instead of a new car.

Why drivers gravitate toward lower-value cars (under £10,000)

1. Lower capital outlay & reduced depreciation risk

New cars lose their value fast in the first few years. But, if you get a used car under £10,000, then the car has already taken in most of that drop in price. This means the owner has less financial risk.

2. Running costs often dominate the decision

Money spent on fuel, caring for your car, taxes, and insurance (including any optional extras) often matter more than the price you pay to get the car. A car that is not as costly to buy may have a smaller engine or be more basic. This can help you pay less for your insurance premium and for fixing the car.

3. Ease of replacement & less fear of total loss

If a car accident happens and the car is worth less money, the repair costs and the car’s value are usually closer. Some people feel that if their car is written off after an accident, it is not as tough on them.

4. Tailoring to individual circumstances

Many buyers have things they think about. People need to watch their budget, take care of family, or think about how far the car can be driven. A price limit of £10,000 can work for a lot people. It fits into most monthly spending plans. You can still get a car that works well and you can trust.

5. Insurance premium pressures & “insurance cover vs value” trade-off

Because insurance premium costs depend on the value of your vehicle, a lot of people say that owning a car that is not expensive can help manage what you pay for your insurance policy.

How insuring a car under £10,000 differs from higher-value models

Impact on insurance premium & cover choice

Insurance costs take into account the value at risk. That means they look at how much it would take to fix or replace the car. A car that is worth less usually has lower replacement costs. But sometimes, if the parts are hard to find or the car model is rare, this can make the cost go up.

In the first half of 2025, the UK average motor premium was about £562. A year before, it was more than £620. Comprehensive premiums, though, stayed higher at around £735. This shows that while the value of your car matters, the market and overall costs have a big effect on how much drivers pay.

Still, it is good to know that having a cheap car does not always mean you will get a cheap insurance policy. There are many other things that can change the price.

What factors override car value in insurance pricing?

Even if the car is less than £10,000, insurance companies will look at more things when they set the insurance premium. A lot of the time, these things can be more important than the car’s value.

Driving experience & claims history

Your driving experience can affect what you pay for car insurance. For example, someone who is 45 years old with 20 years’ driving experience and no claims is likely to pay less for their car insurance. An 18-year-old with only one year of driving will usually pay more, even if each person owns a car that costs £8,000.

• Accident history: If you get into car accidents or make insurance claims before, the company will think that you, or another person, brings more risk. Your payments could go up by hundreds of pounds, even if there is only one accident that you cause.
• No-claims bonus: When you keep a no-claims bonus for five years, your payments could drop by up to 60%. Most drivers find that this deal is better for them than their car’s market price.

Individual circumstances

Your personal profile also has a big influence:

• Age: If you are under 25, you will often have to pay more for car insurance. This is because you have less driving experience and younger people get into more accidents.
• Postcode risk: If you live in a busy city centre, your premium can go up. There is more risk of theft and accidents. If you live in the countryside, premiums are usually less.
• Annual mileage: If you drive 20,000 miles in a year, you have more risk than driving 5,000 miles. If you drive fewer miles, it can make your premium a lot lower.
• Occupation: Some jobs make people more likely to have accidents. For example, if you work at night and drive long distances, you may pay more than people who work near home and do not drive as much.

These things often show why two people who own cars that cost the same still pay very different amounts for their car insurance.

Level of cover & optional extras

The cost that you pay will depend on the level of cover you pick.

• Comprehensive cover is more costly than third party or third-party fire & theft cover. It gives you the most protection.
• Optional extras such as breakdown cover, windscreen protection, legal expenses cover, and having a courtesy car will increase the price you pay.
• Modifications and enhancements, for example adding alloy wheels or a better stereo, make the cost higher. Insurers think it will be more expensive to fix the car.

Choosing the right mix of cover and extras is important. Take out what you do not need but make sure you keep what matters, like breakdown cover. This helps you save money and still be covered if something goes wrong.

New cars vs classic / specialist cars

Many drivers in the UK have cars that cost under £10,000. But, insurance companies see new cars and classic cars in a different way.

• New cars: Even basic new cars can have higher car insurance costs. This is because the parts to fix them are more costly, and repair work is not cheap.
• Classic cars: A classic car worth less than £10,000 might still need classic car insurance. These classic car insurance plans often use set values, cover less driving distance, and may ask you to keep the car in a safe spot like a garage. If you follow these rules, this kind of car insurance can be less costly than a normal policy.

So, the value of a car is important. But what type of car it is—whether it’s a new one, a classic, or a special kind—can change how the price is set. The classification plays a big part in this.

Electric car insurance / EVs

Electric cars are showing up more often now in the under-£10,000 range. This is happening as older EVs lose some of their value. But if you want to insure an electric car, know that it is not the same as getting cover for a petrol or diesel car.

• Battery replacement: A car may be cheap, but the battery is the most valuable thing in it. A new battery can cost thousands of dollars to get.
• Repair complexity: It is not easy to work on EVs. A repair often needs a specialist with special tools. That makes the cost for insurers go up.
• Charging and range: Insurers look at where you live. They weigh your access to off-street charging and public charging. They also use your yearly mileage to help decide costs.

This means the cost to buy an electric car may be low. But, the insurance premium can still be higher than for a petrol car that has the same value.

Breakdown cover & policy add-ons

Breakdown cover is often something people add with car insurance. If you have a car that costs less than £10,000, insurance companies still make you pay more to get help if your car stops working. You get help by the road, or someone comes to pick up your car. They can also help you keep going on your way if your car cannot be fixed fast.

• Basic roadside assistance is often the least expensive choice.
• National recovery and onward travel packages usually make premiums go up by £30–£80 each year.
• For cars that are old or have high miles, breakdown cover can be a good thing to have. This is because these cars are more likely to break down.

Optional extras can be good to think about. These may make the premium go up. But, if your car breaks down without warning, they could help you save a lot of money in the long run.

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Is full comprehensive cover worth it for a car under £10,000?

Many people wonder if they should get comprehensive cover when their car is not worth much. The right choice depends on what you want, how much risk you feel good with, and the way you use your car.

Arguments in favour of comprehensive cover

• Protection for your car: If you have a car accident, fixing your car can take a lot of money, even when your car is worth less than £10,000. Comprehensive cover helps you feel safe. It protects you as well as other people.
• Cover for theft, fire, and vandalism: A car does not have to be pricey for someone to steal it. Parts like catalytic converters and electronics make cheaper cars a target, too. A comprehensive cover is good to have, because it helps with these problems.
• Added features: A comprehensive cover may come with several extra features. These can be things like courtesy cars, windscreen cover, and legal help. A lot of people find these benefits feel good to have.
• Peace of mind: People who live or drive in places with more risk feel better with comprehensive cover. It means a car accident or something unexpected will not hurt you with large bills.

Arguments against in certain situations

• Premium vs payout: If the car you have is only worth £2,000, it may not be good to pay an extra £300–£400 every year just to get comprehensive cover. The payout you get later may not be much higher than what you pay in these years.
• Savings fund alternative: Some people save money by picking third-party cover and then use what they save to build a fund for car repairs. They feel this is a good way to use that money.
• Low-risk profiles: You may feel third-party fire & theft cover is enough if you only drive short distances, you live in a safe area, and the car is parked safely. In these cases, people feel that going for comprehensive cover is not really needed.

Balanced approach

The best way is to get more than one quote for every level of cover.

• Third party only
• Third party fire & theft
• Comprehensive cover

Look at not just the price but what is in each insurance policy too. A lot of the time, the cost difference between third party fire & theft and comprehensive cover is less than people think. That means comprehensive cover could be a better deal, even if the car is under £10,000.

Arguments in favour of comprehensive cover

• You get protection for your car, not only for someone else’s car or third party.
• Your plan covers theft, fire, and vandalism, so the car is safer.
• Most times, you can also claim for glass damage and get legal cover.
• This gives you a peace of mind, especially if you live in an area with more theft, vandalism, or accidents.

Arguments against (in certain contexts)

• The added cost to your plan may be more than what you would get if your car is not worth much.
• If you have money set aside that can cover fixing or replacing your car, you might want to take on the risk.
• In places where not many break-ins or fires happen, third-party fire & theft could work for you.

A good way to choose is to get several quotes for your car and how you drive. You can look at full coverage, third party fire & theft, and third party only. Then, look at the cost difference for each one. This can help you make a smart choice.

What are the best ways to find cheap car insurance in the UK?

Finding cheap car insurance means you have to mix the right level of cover with a price that is not too high. There are some ways that work well to do this:

• Compare quotes online so you can see the many insurers out there.
• Adjust voluntary excess where you can, but stay smart so you lower the premium.
• Avoid unnecessary optional extras because they can make the premium go up.
• Consider black box or telematics policies if you feel you are a safe driver.
• Build a no-claims bonus every year, since this can drop your cost by up to 60%.

The important thing is to make sure your insurance policy fits your individual circumstances. Do not just accept the renewal offer that comes by default.

How can I compare car insurance quotes to get the cheapest deal?

Comparison websites can help you. They let you put in details like age, car type, driving experience, and postcode. After you do this, the site shows you quotes made just for you.

I want to tell you how you can get the most out of this process.

• Enter details that are right and stay the same so you get good results to compare.
• Check the level of cover like third party, third party fire & theft, or comprehensive cover. Don’t just look at the price.
• Look at the insurance policy features that they give, like breakdown cover, legal help, or cars you can use if yours is getting fixed. Sometimes the cheaper options won’t give you these.
• Take what you find in the comparison and use it to talk with your own provider about your plan.

If you do not focus only on the lowest price, you can get car insurance that works for you and the things you need. There is car insurance out there that will not be too costly but will still be the right choice for your situation.

Are there any tips for saving money when renewing my car insurance?

Yes — a lot of people pay too much for car insurance when it’s time to renew. Some good, practical renewal tips be:

• Shop around early: You can often get the lowest premium if you shop 20 to 26 days before your policy ends.
• Never auto-renew without checking other deals. People who just let it auto-renew can pay a lot more because of loyalty penalty pricing.
• Increase voluntary excess if you feel it is right, as it can bring down the cost of your premium.
• Update your mileage. If you drive less, you could save on your premium.
• Improve security by adding things like immobilisers, trackers, or alarms to your car. This may help you get discounts.

Even small changes when you renew can help you save a lot.

Which cars typically have the cheapest insurance rates for new drivers?

For people who have just started driving, what car you buy is really important. The cars that are in lower insurance groups, like Group 1 to 5, often have the lowest insurance prices. A few popular cars in these groups are:

These smaller cars with less power often get lower insurance costs for new drivers. This is because they are not as big, fast, or strong as larger or high-performance cars. So, if you are new to driving, these cars can help you save money on insurance.

Are there special deals or discounts available for cheap car insurance online?

Yes, many insurance companies offer special online-only deals. You can not get these offers if you call. Here are some common discounts:

• Online application discounts give you 5–10% off when you buy through a comparison site.
• Multi-car policies help save money when you insure more than one vehicle on the same policy.
• Bundled deals let you get a discount if you buy things together, like breakdown cover or home insurance.
• Introductory no-claims bonus protection is good for first-time buyers.

Using these offers can help lower the cost of your insurance premium by a lot.

How does adding another driver affect the cost of my car insurance?

Adding another driver to your insurance can make your price go up or down. It depends on the person you add.

• Adding an experienced driver like a parent can make the cost lower, mainly for learner driver insurance or those who are young drivers.
• Adding a high-risk driver who has past accidents or points on their license can make the price go up.
• The second driver should be someone who really uses the car. Insurers do not like “fronting,” which is saying the parent is the main driver when it is really the child who drives.

For people who are new to driving or do not have much driving experience, it can be a good idea to add a safe and experienced named driver. This is one of the easiest ways to bring down costs for your policy.

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Real-world scenarios: how value level interacts with risk

Scenario 1: Learner / first-time driver insuring a cheap car

Many people get their first car when they learn to drive. The car is often small and costs less than £10,000. But what matters most for their insurance is that they are new to driving. This will make the premium high, even if the car is not worth much. The cost for comprehensive and third party may not be the same. There could be a large gap between them.

Scenario 2: Electric car in sub-£10,000 range

If you get a budget electric car, your car insurance price will depend on things like how hard it is to fix, how likely the battery is to need replacing, and if there is demand for the parts. The “cheap car insurance advantage” might not be as big now. But, it can still be better than insuring a new EV.

Scenario 3: Optional extras and custom modifications

If your old car has things like a better sound system, special wheels, or a new body kit, these optional extras can cost more to fix. Because of this, the repair cost may be high. So, your insurance premium could go up more than you expect for a car that’s not worth much.

Scenario 4: Moving from third party to comprehensive as experience grows

As you get more driving experience and your record gets better, you might want to increase your level of cover. If your car costs less than £10,000, you can choose better cover options. There is not much extra penalty for that because the price of the car stays low.

FAQs about insuring sub-£10,000 cars