Car insurance groups explained

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Why is it important to know your car insurance group?

It is important when purchasing a new car or renewing your car insurance that you understand what contributes to your premium, and how to save money. Having an understanding of how car insurance groups can affect the price of your policy can be useful, and our guide aims to explain what they are and how they could affect your premiums.

What are car insurance groups?

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Every car in the UK belongs to an insurance group, ranging from one to 50. The lower end of the scale are the cheapest to insure, whilst the higher end of the scale is the most expensive.

The cars which generally have a higher insurance group are those that have a higher value and performance statistics. On the other hand, cars which have smaller engines and lower performance stats are generally in lower insurance groups.

How insurance groups are decided?

car dash

Experts from the insurance industry regularly review which cars fall into each category. Using Thatcham data to identify the cars that are likely to cost insurance the most via claims, each car gets a rating between one and 50. The following factors are used to determine which group a car falls into:

  • Performance: High-performance cars are more of a risk for insurance companies due to more frequent claims. As such, speed, acceleration and power are taken into consideration when deciding which group a car should be in.
  • Price: How much the car is worth gives an indication of the cars specifications and potential repair costs for insurance companies. Therefore, if the car has a high list price, the insurance group is generally higher.
  • Cost of parts: The panel compare a list of 23 common parts to establish how each manufacturer compares to each other.
  • Security features: Factory fitted security features can help to reduce the number of insurance claims. Cars that include features such as high-performance locks, Thatcham alarms and immobilisers are deemed more secure than those without, which is reflected in the car insurance category.
  • Safety features: Cars fitted with features such as anti-lock brakes, electronic stability controls and tyre pressure monitors reduce the risk for insurers and place a car in a lower insurance group.
  • Repair times: The longer a car takes to repair, the higher the costs due to labour. Due to the costs increasing for the insurance company, the pricing of the insurance increases for the customer. A car that takes longer to repair will increase the insurance category.
  • Bumper compatibility: The structure of the bumper can affect the category a car is placed in if it aligns with the insurer’s criteria.

How to reduce insurance costs

money stacked

The best way to reduce your insurance costs is to buy a car in a low insurance category. For example, buying a Volkswagen Polo SE 1.0 65PS 5d, that is in Category 1, will be cheaper on insurance than buying a Range Rover Sport 2.7 TDV6 Stormer 5d Auto, which is in Category 40. If you own a car in a higher insurance category, there are a number of things you can do to get a cheaper insurance quote:

  • Voluntary excess: Excess is the amount you will pay to the insurance company if you file a claim. If you volunteer to pay a higher excess, the insurance company will have to pay less towards repairing or replacing the car, which may reduce your premiums.
  • Telematics: Otherwise known as black box insurance, your insurer may fit a device to your car which monitors your driving. This reduces the risk for insurers as it is deemed you will drive within the laws of the roads.
  • Annual payment: If you pay annually rather than monthly, insurers will often provide a lower price. This is usually due to no APR being applied to your policy.
  • No-claims discount: Showing your insurance company that you haven’t made a claim in a period of time can result in lower premium as your risk is reduced.
  • Car storage: Where you store your car overnight and throughout the day can reduce the costs of your insurance policy.
  • Car security: Additional security features such as immobilisers and trackers can reduce the likelihood of a car being stolen, which reduces the risk for insurers.
  • Mileage: If you drive fewer miles, you are less likely to be involved in an accident and claim on your insurance. As such, driving less and providing this information to the insurance provider is likely to reduce your risk and premium.

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