The impact of car insurance groups on premiums

December 12th, 2019
The

When you choose a car, you may consider a particular model or make, but what you might not have considered is that the kind of car you pick can have a significant impact on the amount you on your car insurance premium. In simple terms, your premium will be far greater on a Porsche compared to a Vauxhall.

This is since insurance firms determine premiums on statistical risk – and since the driver of the Porsche is statistically higher likelihood of making a claim compared to the policy owner of the Vauxhall driver.

Before choosing a policy, it is beneficial to check which car insurance group your chosen car fits into as this will have a knock on effect on how much you pay for your policy.

If saving money is your goal, you will want to choose a car that would have cheap cover. There are a total of 50 car insurance groups, with cars falling into the greatest car insurance groups, the most costly to insure, as opposed to the lowest groups the least expensive.

Car insurance groups explained

All passenger cars built to British specifications is placed in a car insurance group chosen upon by the Group Rating Panel; which consists of insurance industry representatives, including members from the Lloyds Market Association and the Association of British Insurers (ABI).

Vehicles are placed into categories on a car insurance groups list labelled from one to 50, using research undertaken by the Motor Insurance Repair Research Centre (Thatcham).

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

Repairs are a significant factor for insurance providers to consider when assigning a car a rating, not just due to the cost of repairs accounts for greater than 50% of the amount paid out in car insurance claim, according to the ABI.

If a car is chosen that has longer repair times and expensive spare parts, the car will be pushed up into a higher insurance group – and hence will cost more to insure.

Equally, insurance firms will consider performance when a car their rating, since a car that can accelerate and get to high speeds is a ‘higher risk’ car that has a high likelihood of making more expensive claims; and again, this will bump it into a higher insurance group.

To add, insurance firms will also consider the security features present within the car as standard, like glass etching, immobiliser, a visible Vehicle Identification number (VIN) and an alarm, since all these will increase the car’s security – lowering the likelihood of it being stolen; which, in turn, results in the car being placed in a smaller insurance group, and will be more cheap to insure.

How do the car insurance groups work?

In general, cars allocated to “insurance group one” in the car insurance groups table cost the least to insure. Although, you must keep in mind that car insurance groups are solely based to act as advisory service to insurers when determining premiums.

Insurers will also consider the statistical chance of owners of that type of car making a claim, the total value of the car and the cost of repairs.

All these considered, the insurance group in which a vehicle is placed can have a critical impact on the premium you, the customer, are offered. This means is you are looking to pay a smaller premium, it is still worth targeting cars that are in a ‘low’ insurance group.

Which cars fall into which categories?

Considering some of the most popular vehicles, the cheapest to insure tend to also be the least expensive, lower-specification models with smaller engines.

For instance, the Vauxhall Corsa Hatchback may be in group 3, the Renault Clio 1.2 Campus 2007 3d in group 5, the Ford Fiesta in group 8, the Vauxhall Astra Hatchback in group 9, the Ford Focus may be in group 11, and the VW Golf in group 13. Each vehicle is assigned a category depending on their performance (engine size), along with the security features they offer.

To take two polar opposites, the Vauxhall Corsa 1.0 ecoFlex is found in insurance group one, which should result in this car being one of the cheapest to insure. On the other side, the Audi R8 Spyder is assigned to insurance group 50, which results in it costing significantly more to insure.

Since of cover can range so expansively from one group to another, it is critical that you take your time to find out which insurance group the car you plan to purchase falls into before giving away any money – or you may be in for a very expensive shock when it comes to buying insurance. For more information, take a look at Thatcham’s website.

How to cut the cost of car insurance

If you already own a car that falls into one of the more costly car insurance groups, there are still a number of ways to keep the cost of cover down.

An easy way is to add security-enhancing systems, like recognised and approved alarms and immobilisers.

By installing these features, the premium levied by your insurer can be reduced, since the insurer will factor in the lower statistical chance of you claiming, due to the fact you have taken measures to make you car more secure and safer.

Other measurers you can take include taking the option of paying higher excess, and paying your premium upfront, since the majority of insurers charge interest on monthly payments.

Also consider if you really need features, like a courtesy car, since your premiums may fall if you take it off the policy.

As a motorist, you must now be aware of a new order from the European Court of Justice which came into effect on 21 December which states that insurance firms are unable to use gender when calculating premiums.

Although young women used to receive cheaper car insurance since they have few accidents compared to young men, this no longer applies as a result of the directive which has come into effect – making it even more critical to find other ways to avoid rising premiums.

New drivers might consider black box insurance. This uses a satellite tracker to observe how well and when, you drive your car. By measuring breaking, acceleration and speed, this technology offers insurers a more accurate picture of the risk a driver presents – meaning that good drivers can be rewarded with lower premiums.

Other ways in which young drivers can reduce costs include adding an experience and/or older motorist to their policy, and by taking on the Pass Plus qualification. Similarly, a great way to find the best value cover for you is via shopping around to compare prices. The easiest way is via online car insurance comparison site like FreePriceCompare.com.

Compare Car Insurance Providers and Save Up to £200

4000+ reviews