Why Car Choice Affects Insurance

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Insurance providers assess risk, and for new drivers, that means higher prices. They look at age, postcode, driving history, and especially the type of vehicle you're driving. A newer, faster, more expensive car typically results in higher costs due to the price of repairs and increased accident risk.

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That’s where insurance groups come in. All UK cars are placed into groups from 1 (cheapest) to 50 (most expensive) based on criteria like performance, safety, cost of repairs, and security features. For first-time drivers, cars in Groups 1–7 tend to attract the lowest premiums, especially when paired with black box (telematics) policies.

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Top 10 Cheapest Cars to Insure in 2026

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Here are 10 cars that regularly rank among the cheapest to insure for young or newly qualified drivers:

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1. Hyundai i10

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A long-time favourite, the i10 is known for its reliability, fuel efficiency, and low running costs. It usually sits in insurance groups 1 or 2, depending on spec.

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2. Kia Picanto

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Another small city car with solid safety ratings and low insurance bands. It's ideal for learners and those who have just passed their test.

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3. Volkswagen Up

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Despite its premium badge, the Up! is often in Group 1, thanks to low repair costs and modest engine output. It's a classy yet practical choice.

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4. Toyota Aygo X

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Compact and stylish, the Aygo X blends efficiency with affordability. It’s popular among city dwellers and new drivers alike.

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5. Fiat 500

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Known for its chic design and being extremely cute, the Fiat 500 is a budget-friendly option that appeals especially to younger drivers… mainly women but hey, we don’t judge over here.

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6. Dacia Sandero

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The Sandero offers unbeatable value for money. It’s one of the cheapest new cars on the UK market and has impressively low insurance rates.

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7. Skoda Fabia

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Spacious for its size and packed with features, the Fabia consistently ranks as one of the most affordable hatchbacks to run and insure.

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8. Renault Clio

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The Clio is slightly larger than others on this list but still falls in lower insurance groups when you opt for the entry-level engines.

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9. SEAT Arona

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A compact crossover offering a slightly elevated driving position, the Arona balances practicality with surprisingly affordable premiums.

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10. Volkswagen Polo

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The Polo is a solid all-rounder, offering a refined driving experience while still qualifying for lower insurance groups in its basic trims.

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Conclusion

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Insurance costs shouldn’t hold you back from getting on the road. By choosing a smart, efficient car like the Hyundai i10, Skoda Fabia, or Kia Picanto, and following the cost-saving strategies listed above, you can drive with peace of mind, without draining your bank account.

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Have questions about car finance or want help choosing a Halal car finance option that fits your budget? Get in touch or explore our other driver-friendly blogs.