Greener Cars, Have Higher Insurance Costs

The EPA has a new transportation program called Smartway to help people buy greener cars.

In 2004, EPA launched SmartWay^SM — an innovative brand that represents environmentally cleaner, more fuel efficient transportation options.

In its simplest form, the SmartWay brand identifies products and services that reduce transportation-related emissions.  However, the impact of the brand is much greater as the SmartWay brand signifies a partnership among government, business and consumers to protect our environment, reduce fuel consumption, and improve our air quality for future generations. 

But, the WSJ brings up an interesting point about the greener cars having higher insurance costs.

Wieck/Toyota

Toyota Yaris 5-Door Hatchback

This year's higher gasoline prices are prompting drivers to switch to smaller, more fuel-efficient cars. The trouble is, some of the money they save may be going to higher insurance premiums.

Small cars generally cost more to insure than larger ones because they're involved in more accidents and incur bigger claims, especially for injuries. That's true regardless of the driver profile, though younger and less-experienced drivers tend to buy smaller, cheaper cars.

A 40-year-old male driver would pay an average of $1,704 to insure a 2009 Mini Cooper that gets 37 miles per gallon on the highway, according to a study by Insure.com, an online insurance broker. That same driver would pay only $1,266 -- a difference of $438 -- to insure a Toyota Sienna Minivan, which gets 23 mpg.

Similarly, a Honda Civic compact that gets 36 mpg on the highway costs $412 more a year to insure than a Honda CR-V, a small sport-utility vehicle that gets 27 mpg.

Keep in mind when working on green projects to get your finance group involved as they’ll help figure out the total costs.