Car Insurance Groups

The impact of car insurance groups on premiums

When it comes to choosing a car, you may have a particular make or model in mind, but what you may not realise is that the type of car you choose can have a big impact on the car insurance premium you end up paying. Put simply, it will cost you far more to cover a Porsche than it will to cover a Vauxhall.

This is because insurers base premiums on statistical risk - and because the driver of the Porsche is statistically more likely to claim on his or her policy than the owner of the Vauxhall.

Before signing on the dotted line, it's worth checking which car insurance group your chosen vehicle falls into as this will have an impact on the price you pay for your policy.

If you're looking to save money, you'll want to opt for a car that is cheap to cover. There are 50 car insurance groups in total, with cars falling into the highest car insurance groups costing the most to insure, while those assigned to the lowest groups costing the least.

Car insurance groups explained

Every passenger car built to UK specifications is assigned to a car insurance group decided upon by the Group Rating Panel; this is made up of representatives of the insurance industry, and includes members of the Association of British Insurers (ABI) and Lloyds Market Association.

Cars are placed into groups on a car insurance groups list labelled between one and fifty, using research conducted by the Motor Insurance Repair Research Centre (Thatcham).

The way that cars are assigned to the car insurance groups table is worked out based on a number of factors, including repairs, the cost of spare parts, the performance of the vehicle, safety features, and the price of a new model.

Repairs are an important factor for insurers to consider when giving a car a rating, not least because the cost of repairs accounts for more than half of the amount paid out in motor insurance claims, according to the ABI.

If you choose a car which has longer repair times and costly spare parts, the vehicle will get bumped up into a higher insurance group - and therefore cost more to insure.

Similarly, insurers will consider performance when giving a car its insurance rating, as a vehicle which can accelerate rapidly and reach high speeds is a “higher risk” car which is likely to generate more expensive claims; once again, this will push it into a higher insurance group.

In addition, insurers will also consider the security features which come as standard with the car, such as an alarm, immobiliser, glass etching and a visible Vehicle Identification number (VIN), as all these will improve the car's security - reducing the chances of it being stolen; this, in turn, means the car will be placed in a lower insurance group, so will be cheaper to insure.

How do the car insurance groups work?

Generally speaking, cars allocated to “insurance group one” of the car insurance groups table are the cheapest to insure. However, you need to bear in mind that car insurance groups are purely there to act as an advisory service to insurers when calculating premiums.

Insurance firms will also take into account the cost of repairs, the overall value of the vehicle, and the statistical likelihood of owners of that type of vehicle making a claim.

That said the insurance group that a car is placed into can still have a significant impact on the premium offered to you, the customer. This means that if you're looking to pay a lower premium, it's still worth focusing on cars which are in a “low” insurance group.

Which cars fall into which categories?

Looking at some of the most popular cars, the cheapest ones to insure are those vehicles which tend to be less expensive, low-specification models with smaller engines.

For example, the Vauxhall Corsa Hatchback could be in group 3, the Ford Fiesta could be in group 8, the Vauxhall Astra Hatchback could be in group 9, the Ford Focus could be in group 11, the Volkswagen Golf could be in group 13, and the Renault Clio 1.2 Campus 2007 3d could be in group 5.
Each car is categorised based on its performance (engine size), as well as the security features it offers.

To take two extremes, the Vauxhall Corsa 1.0 ecoFlex is in insurance group one, which should make this one of the cheapest vehicles to ensure. By contrast, the Audi R8 Spyder falls into insurance group 50, which means it will be significantly more expensive to insure.

Given that the cost of cover can range so widely from one group to the next, it's vital that you take the time to check which insurance group the car you're planning to buy falls into before handing over any money - or you could be in for a costly shock when you come to purchasing insurance. For more information, visit Thatcham's website.

How to cut the cost of car insurance

If you already own a set of wheels which falls into one of the more expensive car insurance groups, there are still plenty of steps you can take to keep a lid on costs.

One of the simplest ways to bring costs down is by adding security-enhancing systems, such as recognised and approved immobilisers and alarms.

By adding these features, you can reduce the premium levied by your insurer, as the insurance firm will factor in the lower statistical likelihood of you making a claim, as you have made the vehicle safer and more secure.

Other tips include opting to pay a higher excess, and paying your insurance premiums upfront, as most insurers charge interest on monthly payments.

Also think about whether you really need features, such as the use of a courtesy car, as your premium could reduce if you remove this.

As a driver, you now need to be aware of a new ruling from the European Court of Justice which came into effect on 21 December that states that insurers can no longer use gender when calculating premiums.

While young women used to get cheaper car insurance because they have fewer accidents than young men, this is no longer the case now that the directive has come into force - making it even more important to find other ways to curb rising premiums.

New drivers could consider black box insurance. This uses a satellite tracker to monitor when and how well, a car is being driven. By measuring speed, acceleration, and breaking, this technology gives insurers a more detailed picture of the risk a driver poses - meaning they can reward good drivers with lower premiums.

Other ways in which young motorists can cut costs include opting to add an experienced driver to their policy, and by taking the Pass Plus qualification. Equally, one of the best ways to find the best value premium for you is by shopping around to compare prices. The simplest way to do this is through an online car insurance comparison site such as MoneySupermarket.

For more ideas on how to reduce the cost of your car insurance premiums, visit our money saving tips page.