When it comes to finding a car that’s easy on the wallet, the battle between running costs and insurance premiums can feel intimidating. If you’re a young driver, or someone who simply wants to cut down on expenses, understanding which cars are the cheapest to insure is key to saving money. The good news? The UK car market offers plenty of affordable options in 2025 that don’t sacrifice reliability for cost effectiveness.
Here, we break down the top 7 cars to consider for 2025, based on insurance group ratings, fuel efficiency, and overall affordability. Whether you’re looking for a first car, or just trying to find something more economical, these cars will help you stretch your budget without sacrificing quality.
Why Running and Insuring a Car is Important in 2025
In 2025, car insurance premiums have started to fluctuate. In January, the median annual price for comprehensive car insurance in the UK was £546.35 for those paying annually, or £573.73 for those choosing monthly payments. The trend towards higher premiums for young drivers is expected to continue, with drivers aged 17-19 paying an average of £1,513.64 annually for their cover.
This means the type of car you buy has a huge impact on the price. When you buy a car, it’s important to choose one that keeps your insurance premiums low. After all, a low insurance premium means more money in your pocket for other expenses – whether that’s fuel, maintenance, or just saving for your next holiday.
Top 7 Cheapest Cars to Run and Insure in the UK 2025
1. Ford Fiesta
- The Ford Fiesta has long been a favourite on UK roads, and it’s for good reason. The Fiesta falls into the lower insurance groups, making it one of the most affordable cars to insure. For young drivers, premiums start around £428 annually for those with one year of no claims, making it a solid option for people watching their budget.
- Premiums starting at £428 annually for young drivers
- Insurance group: Lower groups, making it cheaper to insure
- Fuel efficiency: 55-60 mpg
- Used prices starting around £2,000
- Compact design ideal for urban driving
The Volkswagen Up! is a top contender when it comes to low insurance premiums. Many variants of the Up! fall into insurance group 1, including the Take Up and Move Up models, which makes this car extremely affordable for those on a budget. With its reputation for reliability, the Volkswagen Up! is an ideal choice for anyone seeking an inexpensive car to run and insure.
- Premiums starting from around £428
- Insurance group: Group 1, among the cheapest
- Fuel efficiency: 60-65 mpg
- Compact, perfect for city driving
- Used models available under £3,000
The Toyota Aygo continues to be a go-to small car for budget-conscious drivers. With insurance premiums starting from around £663 annually for those over 30, and under £1,000 for younger drivers, the Aygo is an affordable option for a wide range of customers.
The Toyota Aygo is also known for its reliability and strong resale value, which are key factors when considering a second-hand car. It’s a great choice for anyone looking for a used car under £3,000.
- Premiums from £663 annually for drivers over 30
- Insurance group: Ranges from group 6-8
- Fuel efficiency: 56-65 mpg
- Excellent resale value
- Reliable and durable for long-term ownership
4. Hyundai i10
The Hyundai i10 offers both low insurance premiums and impressive fuel efficiency. Many versions of the i10 are in insurance groups 1 or 2, which means drivers can expect to pay around £428 annually for coverage. With Hyundai’s solid reputation for reliability, the i10 is also known for its durability, ensuring it runs smoothly without incurring costly repairs.
As a used car, the Hyundai i10 is a great option for those seeking an affordable, fuel-efficient vehicle for both urban and longer journeys.
- Premiums starting at £428 annually for young drivers
- Insurance group: Groups 1-2 for low-cost coverage
- Fuel efficiency: 55-60 mpg
- Hyundai reliability ensures minimal repair costs
- Compact and ideal for city driving
The Skoda Citigo is a well-built, budget-friendly option for anyone looking to keep both insurance and running costs low. Most models of the Citigo fall into insurance groups 1 or 2, meaning it’s easy on the wallet when it comes to premiums. As a used car, you can find a Skoda Citigo for under £3,000, making it an affordable choice that won’t cost you much to maintain or insure.
- Premiums starting from £428 annually for young drivers
- Insurance group: Group 1-2
- Fuel efficiency: 60 mpg on average
- Used models available for under £3,000
- Well-built and budget-friendly
The Vauxhall Corsa has been a staple in the UK car market for years, and it continues to be one of the most affordable cars to insure in 2025. Many models fall into insurance groups 2-7, making it an excellent choice for young drivers looking to save on premiums. The Vauxhall Corsa is a practical, reliable, and popular option for anyone on a budget.
- Premiums from £428 for young drivers
- Insurance group: 2-7 for affordable premiums
- Fuel efficiency: 50-55 mpg
- Popular choice with a strong resale value
- Practical and reliable for daily use
The Kia Picanto is another low-insurance option that is perfect for young drivers and first-time buyers. Many models fall into insurance group 1, which keeps premiums low, starting from around £450 annually. A used Kia Picanto can easily be found for a good price, making it a great option for those seeking an affordable second-hand car that’s cheap to run and insure.
- Premiums starting from £450 annually for young drivers
- Insurance group: Group 1
- Fuel efficiency: 55-60 mpg
- Used prices under £3,000
- Perfect for first-time car buyers or city dwellers
Factors to Consider When Choosing a Car to Run and Insure
When choosing a car to run and insure, several factors will affect your overall costs. These include:
Fuel Efficiency and Emissions
Fuel efficiency plays a major role in reducing the cost of running your car. The more miles you can get out of a litre of fuel, the less you’ll need to spend at the pump. Emissions also impact running costs, as cars with lower CO2 emissions often benefit from lower road tax.
Insurance Group Ratings
As mentioned earlier, cars in lower insurance group are typically cheaper to insure. The lower the insurance group, the cheaper the car will be to insure, making it an important factor for budget-conscious drivers.
Maintenance and Repair Costs
Some cars, while cheap to buy, can be expensive to maintain. Consider the availability of parts and the overall reliability of the vehicle before making your decision.
Conclusion
Choosing the right car for both running and insurance costs is all about balance. By selecting a vehicle that’s in a low insurance group, fuel-efficient, and reliable, you can save money every month while still enjoying a great driving experience. Whether you’re a first-time driver or simply looking for a more economical option, the cars mentioned here are a great starting point.
At Cars Under £3000, we offer a wide range of reliable, affordable-to-run, and cheap used cars to suit your needs. With many options under £3,000, you’re sure to find a vehicle that fits both your budget and your lifestyle. The future of affordable cars in the UK is bright, and we’re here to help you find the perfect match. Visit us today to explore your options.