UK Car Insurance Groups Explained

10th Mar 2021

Understanding Insurance Groups

At some point or another, you may have come across the term 'insurance group' when searching for a new car or looking for a more competitive insurance quote.

Having an understanding of how car insurance groups work could help you save a considerable amount in the long run because some cars are cheaper to insure than others.

In addition to explaining how the grouping process works, we've also highlighted other factors that will affect your annual premium, as well as any tips for lowering the cost.

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.

How are insurance groups decided?

man shopping online and holding payment card

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 the following 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: The faster you can go the more likely you are to get involved in an accident, 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:

Others factors that affect premiums

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:

  • Age: We've all seen stories in the news of young drivers who have been quoted extortionate prices. The reason for this is because 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.

Tips for reducing your car insurance premium

Nissan Qashqai

As with any insurance quote, there will always be factors you can't influence. For example, you're not going to move house or change career just to save £100 annually; that would be daft. However, there are some changes you can make that may help lower your premium:

  • Excess: This is how much you would pay towards a claim before the insurer covers the rest. The more you're willing to pay, 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 do 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 is 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.

Here to Help

Hopefully we've clarified what insurance groups are and how they affect your annual premium. It's important to remember that just because the car you're considering is in a higher group that it doesn't mean you'll have sky high premiums as a result.

There are a number of other factors to consider as we've highlighted above. However, if you need a car that is inexpensive to insure, then check out this list of used cars under £5,000 that are in low insurance groups. Alternatively, have a browse of our range of used cars and see what tickles your pickle.