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FWD vs AWD: Does AWD make insurance cheaper?

Fact-checked with HomeInsurance.com

Whether you’re shopping for your next vehicle or researching to find out why your insurance payments are so high, it’s important to know the difference between all-wheel drive and front-wheel drive. It’s also important for you to know how these systems affect your insurance rates.

What is FWD?

Front-wheel drive is a vehicle drivetrain system that sends power to a vehicle’s front axle. This system “pulls” a car by its front wheels, rather than “pushing” from its back wheels. You will see this drivetrain system most often with sedans and entry-level SUVs.

Though a front-wheel-drive system isn’t as road-gripping as its all-wheel-drive counterpart, it does have its advantages. Vehicles equipped with front-wheel drive often have a more efficient fuel economy than their all-wheel-drive counterparts. This is because a car that only has to power two wheels uses less fuel than one that has to power all four.

What is AWD?

All-wheel drive is a drivetrain that is able to send torque to all four of a vehicle’s wheels. Many modern all-wheel-drive systems can split the amount of power sent to each wheel as road conditions and driving habits change. The vehicle is both “pushed” by the back wheels and “pulled” by the front.

Drivers often choose vehicles with all-wheel drive for the boost in traction. All-wheel-drive vehicles are more able to maintain a grip on wet and icy roads than their front-wheel-drive counterparts. Though all-wheel-drive systems are more expensive than front-wheel-drive systems, that investment may be worth it to drivers who want the security of better traction.

Some modern all-wheel-drive systems have a disconnect feature that only sends power to all four wheels when road conditions call for it. Otherwise, it acts similarly to a front-wheel-drive system. This helps increase the fuel efficiency of vehicles equipped with all-wheel-drive.

Does having AWD affect car insurance costs?

All-wheel-drive and four-wheel-drive systems are generally more expensive to insure than front-wheel-drive systems. However, once your insurance company takes into consideration other features, such as body style, security systems and others, you may end up with an all-wheel-drive vehicle that costs less to insure all around than a front-wheel-drive vehicle. It all depends on the car you’re insuring, as well as your driving history.

For example, if you take two models of the same trim level equipped identically in every way except that one of them has an all-wheel drive, you will likely pay more insurance on the one with all-wheel-drive. The reason for this extra cost is that all-wheel-drive systems have more moving parts, which means more opportunities for something to need repair on your vehicle. When taking into account how much it costs to service all-wheel-drive systems, insurance companies may increase your payment to cover potential repairs should something go wrong with your vehicle’s drivetrain.

However, an SUV with all-wheel drive may cost you less insurance than a sedan with front-wheel drive because of other factors such as safety and security features.

The alternative: winter tires

If you have a vehicle with front-wheel drive or you want to purchase one to save money on your insurance and fuel economy, you can still improve your vehicle’s traction with winter tires. As their name suggests, winter tires give your vehicle a boost in traction on snowy or icy roads. Winter tires are made with rubber that’s designed to not stiffen when temperatures drop to maintain your vehicle’s grip on cold roads. They also often feature tread with wider gaps to improve traction on slick surfaces.

You can buy a set of winter tires for less than the cost difference between a front-wheel-drive and all-wheel-drive system. According to Kelley Blue Book, a set of winter tires for a 2019 Hyundai Santa Fe is around $800. Keep in mind that winter tires are for use only during the winter, meaning you’ll replace them with your summer tires once the temperatures rise. That means you can get more than one season out of a good set of winter tires.

You can find a relatively good deal on a vehicle with an all-wheel-drive system. The 2017 Honda CR-V’s all-wheel-drive system increased its price tag by $1,300 — an inexpensive example. But when you’re making your calculations, you should also take into account the rise in insurance costs and fuel usage when you’re trying to decide between a vehicle with all-wheel drive or a front-wheel-drive vehicle with winter tires.

Other ways to lower car insurance costs

There are many ways you can lower your car insurance costs. Some of these methods are best used before you purchase your car, but there are some things you can do to lower the insurance costs of your current vehicle.

  • Study safety ratings: Before you buy your vehicle, look at which ones score high on safety tests. Vehicles with high safety ratings are generally less expensive to insure. Use trusted sources such as the Insurance Institute for Highway Safety (IIHS) to find the safest models in the body style you want.
  • Look for discounts: If you’re trying to lower your existing insurance costs for a vehicle you’re currently driving, there are some discounts you may be able to take advantage of. If you haven’t had any accidents or violations for some time, you may be eligible for a discount. If you drive less than the average driver, you may be eligible for a low-mileage discount. It all depends on your situation and what your insurance provider offers.
  • Increase your deductible: One way to save insurance costs is to increase your plan’s deductible. In the event of an accident, if you pay a higher deductible you’ll pay more out of pocket. But you could save on your monthly payments in the meantime. If you take this route, you might consider setting aside a little extra money to cover your higher deductible.
  • Lower your plan’s coverage: Another way you could save money is by lowering your insurance coverage if your car is an older model. Check Kelley Blue Book to see the value of your vehicle so you can better decide if the amount of coverage you have on it is worth it.

The takeaway

  • Cost-conscious drivers might consider the financial benefits of the lower price tag and insurance costs of a front-wheel-drive vehicle, as well as the improved fuel economy.
  • Drivers more concerned with capability might view an all-wheel-drive system as an investment.
  • Drivers looking for a good mix of both can look into equipping their front-wheel-drive vehicle with winter tires when roads are slippery.

The decision between driving a vehicle with all-wheel drive or front-wheel drive depends largely on what your concerns are. It’s all up to what you need and want as a driver and what you can afford. Though the increase in insurance costs for an all-wheel-drive system may sometimes be small, it can add up when coupled with other factors that also increase insurance costs. Though the world of auto insurance may be confusing at times, you only need to do a little research to find the best deal for you and your lifestyle.

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