Car Insurance Groups Explained | What Are They?

Insurance Group Meaning

You may have come across the term 'insurance group' when searching for a different car or looking for a more competitive insurance quote.

An insurance group is basically used to help providers identify how much of a risk a car is. A number of factors are taken into account when deciding this.

Discover how the grouping process works, what factors affect your premium, and tips for lowering the price you pay.

• What are car insurance groups?
• How do car insurance groups work?
• What are the cheapest cars to insure?
• What affects car insurance?
• How to get lower car insurance
• Frequently asked questions

What are car insurance groups?

Every new vehicle is placed within an insurance group that ranges from 1 to 50 (group 1 is the lowest and 50 is the highest). Vehicles that are placed in lower groups are cheaper to insure on an annual basis, while those placed in the higher groups will cost more.

Essentially, if you plan on buying a car that is rare, fast or expensive (maybe all three) then you can usually expect to pay a higher premium because it's likely that car will be placed in a higher insurance group.

The group rating system has been put in place to help insurers calculate a premium for its customers. Although other factors affect the amount you pay (see below), the groups give insurers an established foundation to work from.

What do the letters mean in car insurance groups?

A letter is also assigned after the insurance group number by providers, which represents the vehicle's level of safety.

A: The car meets the set standards for its group.

D: The car has been placed in a higher insurance group because it doesn't meet the set requirements for its group.

E: The car has been placed in a lower insurance group because it exceeds the set requirements for its group.

P: Because the rating system was incomplete when the car was launched, the data for the car is only provisional.

U: The car has security that falls well below requirements. The car could still be insured, but the provider may ask you to fit upgraded security features.

G: The car has been imported. There are two groups used for imported vehicles: parallel imports and grey imports.

How do car insurance groups work?

A vehicle's insurance group is decided by the ABI Group Rating Panel, which is made up of members from the Association of British Insurers and the Lloyds Market Association.

The panel uses data from Thatcham research and assigns new car models to an insurance group based on a variety of factors.

• The vehicle's value: Usually, the cost of a car correlates with the amount it would cost to repair that car.
• Cost of parts: Cars with high parts prices are typically dearer to repair and therefore get placed in a higher insurance group.
• Repair times: The panel compares a list of 23 common repair items with similar manufacturers. The longer the repair time on average, the higher the group.
• Performance: Faster cars are typically more challenging to drive than the likes of your average family hatchback, which is why performance figures are taken into account.
• Safety equipment and features: Vehicles fitted with the latest safety technologies (e.g. autonomous emergency braking) are less likely to be involved in a collision.
• Car security: The harder it is for the car to be stolen or broken into, the lower the insurance group will be.

What are the cheapest cars to insure?

There's no textbook answer for this one because there are a variety of cars that occupy the lowest insurance groups.

Typically, vehicles that were relatively inexpensive new and don't have much in the way of performance are the least expensive to insure. We have highlighted some of our most popular models that occupy low insurance groups below.

Vauxhall Corsa

A popular everyday supermini that starts from insurance group 2. 

Toyota Aygo

Starting from insurance group 5, the Aygo is perfect for city dwellers.

Hyundai i10

Entry-level models sit in insurance group 4, meaning the i10 premiums should be relatively inexpensive.

Volkswagen up!

It doesn't get much lower than insurance group 1, which is where the up! starts from.

What affects car insurance?

It's worth remembering that just because a car occupies a higher insurance group that it doesn't automatically mean that your annual premiums are going to be high.

There are a number of other factors insurance providers take into account when providing a quote:

• Driver age: We've all seen stories in the news of young drivers who have been quoted extortionate prices. The reason for this is that younger drivers have no experience and are statistically more likely to get involved in an accident.
• Location: Some locations in the country have more reports of theft and vandalism compared to others, which typically results in higher premiums for motorists living in those areas.
• Driving history: Insurance companies take into account any accidents or incidents you've been involved in within the recent past. If you have previous claims or a driving conviction, then that will reflect in your premium.
• Occupation: Some occupations and industries are higher risk than others, which can translate into a higher premium.

How to get lower car insurance

As with any insurance quote, there will always be factors you can't influence. For example, you're unlikely to move house or change career just to save £100 annually.

However, there are some changes you can make that may help lower your premium.

• Voluntary excess: This is how much you would be willing to pay towards a claim before the insurer covers the rest. The more you're willing to contribute, the lower your annual premium will be.
• Named drivers: If you're a younger driver, then adding another driver with a wealth of experience and a clean history could lower your premium.
• No claims bonus: The longer you've gone without claiming on your insurance, the lower your premium will be. This is worth considering if you do some minor damage to your car, as it may work out cheaper in the long run to complete the repair privately.
• Drive less: The miles you travel in the car directly correlates to the amount you pay for your insurance. If you can, lower your policy's annual mileage and look to other modes of transport.
• Pay annually: Although there's nothing wrong with paying for your premium on a monthly basis, insurance providers will typically charge interest for the privilege. We recommend paying annually if you have the means.
• Car storage: Where you keep your car has an effect on your premiums. So if you have an unused garage that can house the car, it could help you save money.

Other Frequently Asked Questions