When the economy goes into a downward spiral like it currently is, people scramble to find ways to save money but it seems there's always a catch.
For example: when gas prices went up to $3-per-gallon (and beyond) over the last couple of years, many consumers began clamoring to get out of their big gas-guzzling SUVs and sedans, flocking to smaller cars that delivered better fuel economy.
But even before gas prices dropped to the $1.60 range in November; those new small-car buyers discovered a hitch in their plan to save money: insurance premiums for smaller cars are typically higher than for larger vehicles. This has been true for decades, but so many drivers had been motoring around in SUVs, pick-up trucks and big sedans for so long that this fact probably slipped their memories.
"Small cars are just more likely to get into crashes, because of how they are driven -- they are more likely to be used in longer commutes than a minivan or SUV, for example," said Kim Hazelbaker, senior vice president of the Highway Loss Data Institute, a group supported by auto-insurance companies that studies insurance data and costs. "That translates into higher premiums. And since smaller cars don't protect the occupants as well as larger vehicles, the cost of injuries to those occupants is higher as well. And that also contributes to more expensive premiums."
Of course, many of those who migrated out of big vehicles went the hybrid route. However figures reveal that hybrids are also more costly to insure than their non-hybrid equivalents.
"We did a study comparing the hybrids to their non-hybrid counterparts -- like, the Honda Civic hybrid compared to the non-hybrid Civic, etcetera -- and we found that the hybrids are not only more likely to be in crashes, but they cost more to repair," Hazelbaker said.
The reason hybrids are more likely to be in crashes, Hazelbaker said, is similar to the reason that smaller cars are more likely to be involved in accidents. "Hybrid drivers tend to 'super commuters': people who have longer commutes, who bought the hybrids to save on fuel and cut emissions during 50, 60, 70-mile commutes," he said. "So the increase in miles driven translates to more frequent crashes."
"Remember, small cars are also harder to see when you're driving in a world full of sport utility vehicles and pick-up trucks, so the likelihood of another vehicle crashing into them increases," added Carolyn Gorman, vice president of the Insurance Information Institute, an insurance industry trade association. "And when you're in a small car, you feel like you can get into smaller spaces and get around larger and more cumbersome vehicles, so maybe those drivers do drive in a way that is more aggressive -- they try to sneak into gaps in traffic that bigger vehicles wouldn't, which can in turn lead to a higher likelihood of an accident."
Insure.com, an online insurance broker, came up some specific insurance-premium costs in a study conducted in August. To develop an average, Insure.com ran quotes for each vehicle with four or five insurance companies across seven different ZIP codes. These prices reflect national averages for a single male driver, age 40, who drives 12 miles to work, with policy limits of 100/300/50. These are all for 2009 models.
First, some of the small cars: The owner of a MINI Cooper, which boasts a fuel economy of 28/37 city/hwy, would pay $1,704.59 in annual premiums. A Honda Civic, with fuel economy of 25/36, would cost $1,670 to insure. And premiums for a Toyota Yaris sedan, which gets gas mileage of 29/35, would run $1,423.95.
By comparison, here are some of the premiums for larger vehicles: $1,194.26 for a Ford F-150 pick-up (with a fuel economy of 14/19); $1,258.40 for a Honda CR-V SUV (20/27) and $1,265.94 for a Toyota Sienna minivan (17/23).
In November, Insure.com released another list comparing insurance premiums for the top 20 selling 2009 models. But Amy Danise, an Insure.com spokesperson, cautioned against making direct comparisons between the November premiums listed below and the August premium prices listed above because "each list is a 'snapshot' in time, and reliable only for comparison to vehicles within the same list, because insurance companies can re-jigger rates at any time," she said. But, just for information purposes, some of the smaller-car premiums reported in the November list were: $1,369 for a Ford Focus (24/35); $1,384 for a Chevy Cobalt (25/37); $1,386 for a Pontiac G6 (22/30); $1,396 for a Toyota Prius (48/45); $1,538 for a Toyota Corolla (26/35) and $1,427 for a Nissan Altima (23/31).
"Actuaries who determine premiums base those costs on a very carefully compiled set of statistics that help them determine the amount of risk," Hazelbaker explained. "We have 30 companies reporting data to us, so we have records of about 150 million vehicles out there, and we report that loss data back to the insurers -- who then use the data to determine the cost of premiums."
In order to assess the likelihood of big liability and damage-coverage payouts to drivers of individual vehicles, the Highway Loss Data Institute assigned vehicles a "rating" based on a combination of the frequency of crashes and the amount of dollars paid out for collision losses. In those ratings, a score of 100 was deemed "average." So, a number lower than 100 reflects a vehicle that is less costly to insure. Using 100 as the average, the organization arrived at the following ratings for some individual vehicles. Please see "Insurance Rating" table above.
"The Scion TC is more than double the average," Hazelbaker noted. "It's small, and those vehicles tend to appeal to younger driver, who do tend to drive more aggressively."
And some of the other through-the-roof numbers have nothing to do with size, but instead are a function of being high-powered muscle cars -- like the Cadillac CTS-V, with a rating of 353, and the Dodge Viper, with a rating of 624.
"Those have big engines in them, and buyers are laying out big money for that power, so they like to use their right foot," Hazelbaker said, "so those are naturally going to be in more accidents because people are driving them faster than the speed limit."
One report indicated that early buyers of the SmartForTwo had a hard time finding insurance companies that would even write policies on them.
"I don't think that's surprising, because I've only seen two of them in the last year," said Gorman, who lives and works in the Washington, D.C., area. "So I think insurers were scratching their heads, they didn't know what to make of it. It was new, so there was no data, and it's so small that initially no one knew what to compare it to."
Ultimately, though, Gorman said that migrating into a small vehicle from a big one does not have to result in a big hit to the pocketbook.
"There are all kinds of factors that go into the cost of insurance premium, from the size of the car, to your age, to other factors," she says. "So the best thing to do before buying a new small vehicle is to talk to your agent and ask him or her what the premiums are for some of the vehicles you're considering. That way, you'll know in advance what to expect, and can make your purchase decision accordingly."
Read More Great Stories at AOL Autos: