Insurance Groups Explained

So many factors affect insurance premiums, it can sometimes be difficult to identify exactly which ones have the greatest impact on the cost. Aside from driving experience, the car you want to get insured is probably going to decide whether you are quoted a three or four figure premium.

We all know your Gran’s 1.0 litre Nissan Micra is going to be cheaper to insure than your next door neighbour’s BMW M3, but do we know why? In this case it’s clearly the massive difference in power, but it isn’t always that simple.

All cars are put into one of twenty groups; with group one being the lowest. This system is administered by the ABI (Association of British Insurers) and used as a guide by insurers. The following factors are used to calculate group ratings:

Damage and Parts Costs - The likely extent of damage to each car model and the cost of the parts involved in its repair. The lower these costs, the more likelihood there is of a lower group rating.
Repair Times - Longer repair times mean higher costs and the greater likelihood of a higher group rating. Different paint finishes on modern cars are an important factor, so these too are taken into account.
New Car Values - The prices of new cars are taken into account as they are often a good guide to the cost of replacement and repair.
Body Shells - The availability of body shells (the basic frame of the car) is taken into account in group ratings because they are essential for certain accidental damage repairs.
Performance - Acceleration and top speed are important factors. Insurers know very well, from their claims statistics, that high performance cars often result in more frequent insurance claims.
Car Security - Security features fitted as standard equipment by motor manufacturers can help to reduce insurance claims costs. Such features include high security door locks, alarm/immobilisation systems, glass etching, coded audio equipment, locking devices for alloy wheels and visible VIN numbers.

Because the Aston Martin DB7 Vanquish sits in group twenty and the new Fiat Panda in group one, you could be forgiven for thinking the ABI weren’t just devising a system to calculate insurance premiums, but in fact a clever wall chart for deciding how ‘cool’ a car is. I think we should point out, however, that lower grouped cars have many, many advantages, especially for young drivers.

For a start they are usually cheaper to buy, tax, insure, service and repair, plus they won’t guzzle fuel like it’s going out of fashion. They are also less powerful, so you are statistically less likely to have an accident and lose your valuable no claims bonus.

Even if your ‘street cred’ is really important to you, don’t worry, group ratings are specific to model versions, so you can still be driving a popular model but with the ‘1.0 L’ rather than the ‘2.0 SXI’ badge.

To try and put all this into perspective, we’ve taken a look at some of the Group One cars currently on the market. Click HERE to see what might be affordable.