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Smart Car Insurance (2023)
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Written by
JJ Starr
Insurance Writer
J.J. Starr is a health and finance writer with a background in banking, lending, and financial advising. She holds a Series 6, FINRA, and life insurance licensure and a master's degree from New York University. Through her writing, she strives to use her decade of experience to help consumers make sound financial choices. Connect with J.J. on LinkedIn.
Edited by
Jackie Cohen
Editorial Manager
Jackie Cohen is an editorial manager at Insurify specializing in property & casualty insurance educational content. She has years of experience analyzing insurance trends and helping consumers better understand their insurance coverage to make informed decisions about their finances.Jackie's work has been cited in USA Today, The Balance, and The Washington Times.
Updated June 15, 2022
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Smart cars built their reputation on being great city cars. They provide excellent gas mileage, and their highly compact design makes finding a parking spot much easier. But they come with drawbacks, including higher maintenance costs. Even though they aren’t the cheapest cars to own, coverage for Smart cars is somewhat cheap. So is a Smart car a smart buy? Let’s explore.
Quick Facts
A Smart car is an ultra-compact vehicle that has excellent gas mileage (or EV distance) and is affordable in the used car market.
Smart cars aren’t the same as smart vehicles — confusingly also called “smart cars” — which offer driving assistance through AI technology.
Insurance premiums for Smart cars tend to be lower than premiums for other compact vehicles. But maintenance costs can be higher.
What is a Smart car?
A Smart car is a two-door hatchback that seats two people. It’s manufactured in partnership with Mercedes-Benz and Swatch (yes, the Swiss watch company). After a strong showing the first year that it was marketed to U.S. buyers, the Smart car dropped in sales and never quite recovered. The last year that new Smart cars were imported to the U.S. was 2019.
Used Smart cars are still strong in the resale market, as they offer unique features prized by some buyers, including:
Maneuverability that makes driving on tight city streets easy
Small dimensions that open up more city parking options
Excellent gas mileage in the city or on the highway
Fully electric models available (Smart Fortwo)
Lower cost than other compact vehicles
However, Smart cars also pose some downsides. First, they have higher-than-average maintenance costs due to reliability issues and to the cost of parts. Second, despite good safety ratings, Smart cars aren’t considered safe for use on expressways due to their small size.
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Car insurance for Smart cars
The types of coverage you need for a Smart car vary based on your state, the age of the car, and your loan status. The most common types of car insurance needed for a Smart car are as follows:
Bodily injury liability: Covers injuries to other drivers and passengers. Coverage limits include a per-person cap and a per-accident cap.
Property damage liability: Covers damages to other people’s vehicles and other physical property.
Uninsured motorist coverage: Covers damages to your person and property if the at-fault driver doesn’t have car insurance.
Comprehensive coverage: Covers damages to your car caused by non-collision events, such as a hailstorm or vandalism.
Collision coverage: Covers damages to your car caused by a collision where you’re at fault or no one is found at fault.
In addition to these coverage options, you may also need some sort of medical bills coverage, depending on state requirements. Some states require personal injury protection. If your car is financed without a down payment, you may also need gap coverage to cover the difference between what your Smart car is worth and how much you owe on your loan.
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How much does Smart car insurance cost?
Insurance for Smart cars costs between $100 and $150 per month for a full-coverage policy — about $1,200 to $1,800 per year. That makes Smart car insurance somewhat cheaper than the average cost of car insurance.
But remember that different car insurance companies calculate costs differently based on many factors. That means you can pay much more or much less than average, depending on how those factors interact with your unique profile.
Factors affecting Smart car insurance rates
Is insurance expensive for a Smart car?
No. Full-coverage car insurance for a Smart car is actually somewhat cheaper than average for compact cars.
Insurance companies use several elements to determine prices. The most important things that influence what you end up paying are:
Your driving record
People with clean driving records pay much less than those who have tickets in their recent past. Generally, the more extreme the ticket, the more expensive the policy. A single ticket for a failure to stop has less of an impact than a DUI. Multiple tickets stack up and can cost you a lot over time.
Where you live
In most places, insurance companies use your ZIP code to look at the claim rates, traffic patterns, weather patterns, and crime rates of your area. People who live in places with fewer accidents, congestion, storms, and car theft pay less.
Your personal information
Age, marital status, and gender (depending on the state) can all affect your rate. Generally, people over 25 who are female and married pay less than their opposites.
Local requirements
State minimum requirements and other state laws can affect the claims risk. If an insurer is more likely to pay out larger claims, rates can be higher in that state overall.
Driving habits
How many miles you put on your vehicle every year can have a sizable effect on your premiums. High-mileage drivers also lose access to low-mileage discounts.
Credit history
In most states, car insurance companies can use your credit score to determine your risk. Companies consider drivers with poor credit to be more likely to make a claim than drivers with good credit.
How to save on Smart car insurance policies
Lowering auto insurance rates is a top priority for all budget-conscious drivers. Because Smart car drivers tend to live and drive in cities, you tend to pay more for car insurance policies. Luckily, there are many ways to reduce your costs.
Raise your deductibles, but no higher than you can reasonably afford in the event of a claim.
Drop insurance coverage that’s no longer needed, such as a gap policy when there’s no longer a gap between what you owe and what the car is worth.
Switch to carrying only liability coverage if you’re driving an older Smart car model.
Build or maintain a good credit score.
Take advantage of all the car insurance discounts you’re eligible for.
Compare car insurance rates with an insurance agency or with a tool like Insurify.
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Smart car insurance discounts
Smart cars don’t come with a set of discounts baked in, but electric models can get up to 5% off with an alternative fuel vehicle discount — a.k.a. the “green vehicle” or “fuel-efficient” discount — available at some car insurance companies. You may also receive a tax credit of up to $4,000 for buying a used electric car.
Don’t forget that there are many kinds of insurance discounts, and many have nothing to do with driving a Smart car. It’s always a good idea to stack your discounts to save as much as possible. Here are some common discounts you can find.
Bundling discount (a.k.a. multi-policy): Purchase policies for two or more insurance products with the same company.
Multi-car discount: Insure two or more vehicles on one policy.
Autopay discount: Set up automatic withdrawals to pay your monthly premiums.
Paperless discount: Get all your policy documents and correspondence by email.
Good driver discount: Remain claims-free while maintaining a clean driving history. Also called the safe driver discount.
Affiliation-based discount: Get a discount based on your alumni group, employer, or other affiliation.
Car safety features: Get a discount for driving a car with airbags, daytime running lights, and other features.
It’s always smart to compare prices before you buy
No matter what kind of car you drive, comparing car insurance is the best method for reducing your car insurance costs for the life of the vehicle. People who compare before they buy and make time to compare rates at least twice a year are far more likely to save money on their car insurance costs year over year. That can mean thousands in savings for the life of a car.
Frequently Asked Questions
No. Car insurance is typically less expensive for a Smart car than for other vehicles. The main reason Smart cars tend to cost less to insure is their low cost. Most smart cars cost $15,000 or less. However, vehicles that only require liability insurance can cost less than insuring a Smart car. A Smart car’s maintenance costs may be higher than the average car.
There are many variables that account for the cost of Smart car insurance. Where you live and your driving record have a huge effect on your insurance rate. That being said, you can expect to pay between $1,100 and $1,300 a year for a full-coverage policy. If you live in a less densely populated area and have a clean driving record, you could pay a lot less.
Whether a Smart car is a smart buy depends on what you need from your car. If getting good gas mileage and finding easy parking are your top priorities, a Smart car can be a great fit. But remember: Smart cars come with higher maintenance costs, and they don’t have high reliability ratings. Lastly, they’re no longer imported to the U.S., which may raise costs in the future.
Smart cars that receive regular maintenance and care last between 150,000 and 200,000 miles. That’s between 10 and 15 years of driving, depending on how many miles you drive each year. Maintenance costs are between $700 and $800 annually — or $7,000 to $12,000 over the life of the car. You can find compact cars that last longer, but they won’t have certain features a Smart car has.
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Data scientists at Insurify analyzed more than 40 million real-time auto insurance rates from our partner providers across the United States to compile the car insurance quotes, statistics, and data visualizations displayed on this page. The car insurance data includes coverage analysis and details on drivers' vehicles, driving records, and demographic information. Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Service's database of auto insurance rates. With these insights, Insurify is able to offer drivers insight into how companies price their car insurance premiums.
