Americans are shopping for extra SUVs than ever, and car corporations are the greatest beneficiaries. But now, because of shifting insurance rates, SUVs are additionally more and more turning into cheaper to personal regardless of their usually greater value tags.
Sport utility autos accounted for 52% of recent car gross sales in 2025, up from 46% in 2021 and 38% in 2016, per Good Car Bad Car. Full-size SUVs have doubled their market share since 2016, representing 3.5% of the market.
The progress in SUV recognition is nice information for automakers. Profit margins for SUVs and vans common 10% to twenty% greater than these for smaller automobiles, since bigger autos are dearer, however use lots of the identical elements, in keeping with The Week.
The Big 3 U.S. automakers are shifting their manufacturing capability away from much less worthwhile electrical autos for now and investing in higher-margin autos.
It’s a transfer that makes excellent monetary sense, in keeping with Bank of America analysts who reinstated coverage on the firm with a purchase score on March 4.
“We highlight Ford & General Motors (see reports) as OEM top picks as we see potential for upward estimate revisions given the shift away from EVs and emissions mandates that limited profitability over the past several years,” the firm said.
“We suppose Ford is positioned effectively to capitalize on the vital shift in the regulatory backdrop underneath the present administration that ought to allow it to shift focus to its most margin accretive vans/SUVs.”
But while car makers benefit from the rise in popularity of higher-margin, higher-priced models, consumers are benefiting from lower-priced insurance, making it cheaper to own an SUV.
Photo by M. Suhail on Getty Images ·Photo by M. Suhail on Getty Images
Insurance companies adjust your rates based on the type of vehicle you own, and they deem safer vehicles as getting lower rates.
“Solid, secure and dependable autos with low restore prices are usually cheaper to insure than sports activities automobiles, overseas autos or automobiles with a historical past of expensive repairs,” according to analysts at CarInsurance.com who ranked the cheapest cars to own, and found that now SUVs are overtaking sedans in affordability.
Subaru Crosstrek: $1,150 average six-month premium
Jeep Wrangler: $1,154 average six-month premium
Honda CR-V: $1,158 average six-month premium
Volkswagen Tiguan: $1,165 average six-month premium
Mazda CX-5: $1,172 common six-month premium
In fact, sedans now cost on average 10% to 15% more to insure than comparable sedans due to structural design differences and claims data.
The Subaru Crosstrek is the most affordable vehicle to insure this year, with an average monthly premium of $192. But it is not alone on the list; the Jeep Wrangler came in tied for second with the Honda CR-V at $193 a month.
In fact, 16 of the top 20 cheapest cars to insure on CarInsurance.com’s list were SUVs.
The Subaru Crosstrek is sensible, and the Japanese-made SUV is Consumer Reports‘ top subcompact SUV pick and one in every of the best-selling autos in the nation because of its security profile.
In fact, Subaru has two vehicles on the top-20 insurance list, with the Crosstrek joined by the Outback station wagon.
“Repair and replacement costs are a huge factor for insurance rates,” says Zach Lazzari, founder at Cross Border Coverage. “For example, some vehicles have very high repair costs for common fender bender damage. Entire panels may require replacements on one vehicle, while others can be fixed with a simple dent remover and some fresh paint.”
The top-5 cheapest SUVs averaged under $1,172 for a six-month premium, while the cheapest sedan (unsurprisingly, a Subaru Legacy) had an average six-month premium of $1,265.
Many Americans buy SUVs not just due to an affinity for big toys, but also because they believe these vehicles are safer.
SUVs are heavier and customarily sit greater than sedans. That further mass can cut back the drive transferred to occupants in a head-on collision or facet impression, in keeping with Pierce Skrabanek.
Also, because SUVs’ higher ride height places the bumper above the main reinforcement zones of a sedan, they are less vulnerable to side-impact crashes than their smaller counterparts.
They also score better in multi-vehicle accidents.
But there are tradeoffs.
Smaller vehicles tend to handle better because they are lighter. So they are better at avoiding collisions altogether if the driver can react in time. Also, due to the higher ride height mentioned above, SUVs have a greater rollover risk than sedans.
That higher center of gravity also works against the vehicle’s control during sharp turns, swerves, or high-speed crashes. Rollover accidents are particularly dangerous because roof crushes and ejections are common in those situations.
