What are vehicle risk ratings?

Key takeaways

• Vehicle risk rating (VRR) is a new way for car insurers to assess risk, replacing the old car insurance group system

• It only applies to brand-new car models that were sold in the UK from 1 August 2024

• If you have a car built before this date or you buy a new variant of a model range that existed before August 2024 your car will still have a group rating score

• VRR should lead to ‘fairer’ car insurance prices but remember that personal factors also affect your premium

What are vehicle risk ratings?

Vehicle risk rating (VRR) is a new insurance rating system for new cars, which helps insurers understand the risks of insuring different car makes and models, based on real-world claims data.

It is gradually replacing the car insurance group rating system but it only applies to brand new model ranges sold in the UK from 1 August 2024.

The transition to VRR for brand new models is due to be completed in the second half of 2026. That means that new model ranges entering the UK between August 2024 and 2026 get both a VRR score and a group rating score.

Model ranges entering the UK after the transition period will receive a VRR score only.

You won’t be affected by the changes and your car will still have a group rating score if:

• Your car was launched before 1 August 2024

• You buy a new variant of a model range that existed before August 2024

Why are vehicle risk ratings being introduced?

The car insurance group rating system doesn’t reflect rapid changes in the automotive industry, including:

• New vehicles becoming more complex with electrified powertrains, advanced driver assistance systems (ADAS) and software-driven functionalities

• New cyber security threats as more cars become connected to the internet and each other, bringing challenges for vehicle security and data privacy

• New materials and manufacturing techniques aimed at reducing vehicle weight and increasing stiffness, which affect repairability

VRR is designed to take these changes into account and modernise car insurance risk assessment.

How are vehicle risk ratings different to car insurance groups?

Some of the key differences are:

• Rather than a car being put in a particular group with other cars, a car is given an individual score

• VRR is based on real-world claims data

• VRR scores are updated regularly to reflect changing market conditions whereas group ratings give each car one score at launch that never changes

What is my car’s vehicle risk rating?

Currently, you can’t find out your car’s individual vehicle risk rating but you should see the impact of the new insurance rating model when you get an insurance quote for a new car (one that went on sale from 1 August 2024 and is part of a brand new model range).

That’s because insurers are already using the vehicle risk ratings during the transition period from car insurance groups to VRR for new cars.

How do vehicle risk ratings work?

VRR evaluates your car across five specific areas, each scored from 1 (indicating low risk) to 99 (indicating high risk). Think of these as five different perspectives on what makes a vehicle risky or safe to insure:

• Damage: Evaluates how vulnerable the vehicle is in collisions based on its design

• Repair: Examines parts availability, costs, and how complex it is to fix the car after an incident

• Security: Evaluates theft prevention measures, including immobiliser technology and keyless-entry vulnerabilities

• Safety: Assesses both active systems like automatic braking and passive systems like airbags and crash protection 

• Performance: Looks at acceleration, top speed, weight, and price characteristics - basically, how the car behaves on the road

Thatcham Research, a not-for-profit automotive risk intelligence organisation, physically tests vehicles at its UK facilities. This involves:

• Completely dismantling cars

• Measuring repair complexity

• Analysing parts costs using real-world claims data from actual insurance incidents

VRR scores are generated by an algorithm that Thatcham Research maintains; there's no rating panel reviewing scores like there is with the group rating system.

What impact could the new vehicle risk rating system have on my car insurance premium?

Thatcham Research suggests VRR leads to “fairer pricing”. That’s because with the group rating system, two completely different cars could end up in the same insurance group, which meant you might pay the same premium for a car that's much riskier than another. VRR “fixes that fundamental challenge”, according to Thatcham.

Which cars have the lowest vehicle risk rating?

The vehicles with the lowest vehicle risk rating perform well in all five assessment areas (damageability, repairability, security, safety and performance) rather than having just one standout feature.

Unlike car insurance groups, the lowest risk vehicles aren't necessarily the slowest, smallest, or cheapest cars.

Thatcham Research says that “they're the ones that have been holistically engineered to be safer, more secure, and more economical to repair”.

And, it adds, that “because VRR scores stay current with market conditions, vehicles that maintain good parts availability and reasonable costs throughout their lifecycle continue to score well”.

How does vehicle risk rating affect electric car insurance?

There are still insurance challenges with electric vehicles (EVs) around repairs due to high-voltage battery systems, specialised repair requirements and sometimes expensive parts. But, unlike car insurance groups, VRR repair scores for electric cars can improve as EV repair infrastructure develops and parts become more widely available.

Do vans have a vehicle risk rating too?

Yes, new vans (also known as light commercial vehicles) on sale in the UK from 1 August 2024 go through the VRR process and have a rating too, just like new cars.

📣 Did you know? More than 1,000 new cars and vans have been assessed under VRR in 12 months. And about 89% have received different risk profiles compared to what they would have had under the group rating system, according to Thatcham Research.

Do vehicle risk ratings change over time?

Yes, unlike car insurance groups, vehicle risk ratings update regularly as market conditions change. For example, when the availability of particular car parts improves or there is a change in the cost of repairs, the scores are adjusted.

Will vehicle risk ratings be applied to older cars?

No, there is no retrospective testing happening. The new VRR only applies to brand-new model ranges launched from 1st August 2024 onwards.

If you bought your car before that date it already has its group rating score, and that's not changing. VRR is specifically designed for new model ranges entering the UK market for the first time.

What other factors affect my car insurance premium?

Insurance companies take a range of factors into account when working out the cost of your premium. These include:

• Your age

• Your driving history

• Your occupation

• Where you live

• Where you park your car

• How you plan to use your car

• How many miles you drive in a year

• Your car's security features

• Your no-claims bonus

Car insurance costs can vary a lot between providers. It's worth comparing multiple car insurance quotes to find the best deal for you.