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 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.