Tips and Advice

UK car insurance groups explained

In the UK, car insurance groups run from 1 to 50 and are set by the ABI - here we explain everything you need to know

Buying car insurance is one of the biggest expenses facing motorists, especially if you are a young or inexperienced driver. But doing a little research to compare insurance groups before purchasing a car can save you a substantial amount of money, with similar models varying substantially.

UK car insurance groups can be a mystery, but they are part of the complicated formula which is used by insurance brokers to work out how much of a risk you are. Other factors relate to the driver and include your age, occupation, where you live, where the car is kept and how many miles you drive.

Cheapest cars to insure in the UK

But the car itself is a big part of the cost. Insurance companies will know how likely a car is to be stolen or crashed and how much it will cost to repair based on research and previous experience.

To simplify and standardise the process, in the 1970s the Association of British Insurers (ABI) set every car into groupings. The original group ratings were from 1-9. In 1992, this was increased to 20, but with ever-increasing diversity in the new car market, the current 50-group system was introduced in 2006.

Vehicles from the 10 years prior to the new system being introduced – 1996 or later – are classified according to the same 50 groups as new cars are today. For cars built before 1996, premiums are calculated based on an insurer's own experience.

This means there’s scope to award different ratings to different specs and trims within model ranges, based on if they are sporty, premium or entry-level models.

If you want a good illustration of what that can mean, the Audi A3 line-up which starts at insurance group 18 for the basic 1.6-litre diesel three-door hatchback, rising all the way up to insurance group 46 for the range-topping S3 Cabriolet. For the best-selling Ford Fiesta, a Studio model fitted with the 1.25-litre engine is way down in group 5, but the same car in Titanium X trim with the 125bhp 1.0-litre EcoBoost engine sits in group 16.

These differences reflect how the sportier and high-level trims are more likely to be driven quickly, stolen and how much more expensive they are to repair after an accident.

The ratings are set using a lot of research. The ABI works in conjunction with vehicle security and repair expert Thatcham to compile the insurance classifications for every car sold in the UK. The two main areas of research are how much damage a car sustains in a collision and how cheap and easy it is to repair after an incident.

The factors used to set an insurance group, include:

Parts availability and price: For repair purposes, Thatcham uses a list of 23 commonly damaged parts for pricing. Availability is taken into account as a driver may demand an expensive hire car while theirs is being repaired and delays in sourcing parts will cost more in rental fees.

Performance: The manufacturer-quoted 0-62mph acceleration figure and top speed of a specific car are used as benchmarks as faster cars are more likely to be involved in accidents or stolen.

Price when new: The vehicle list price is used to calculate the cost of a settlement if the car is written off.

Repair costs: Thatcham performs its own low-speed crash tests (chiefly a 15km/h impact) and engineers determine the cost of parts and fitting to return a car to its pre-accident condition. Some manufacturers actually discount these easily-damaged parts to keep the grouping lower.

Another way for a car to improve its insurance group rating is by offering a high standard of safety which will either prevent accidents in the first place or reduce injuries (and therefore compensation claims) if a crash happens.

As an example, many new cars now feature autonomous emergency braking which will automatically stop the car if a rear end collision is imminent. If this tech is fitted as standard, a vehicle can drop one group once it's been tested by Thatcham. Other advanced active safety aids can also have a positive effect on the insurance grouping of a car, as long as they are standard-fit equipment.

High parts prices or labour rates at dealerships are taken into account when deciding a car's grouping. So, if one manufacturer's dealers are more expensive, its cars could creep up the scale - even in cases where cars are mechanically similar. For example, the Audi A3 and Skoda Octavia have similar running gear, but the Audi has insurance group ratings from 18-45, while the Octavia occupies groups 13-30.

Once all of these factors are taken into account, Thatcham then classifies each new car into the 1-50 insurance groups, and then it adds a security rating. Theft is still one of the chief reasons for big insurance claims, so the security of a vehicle will qualify it for a lower insurance premium. At the top end, cars with excellent security features move into a lower insurance group, while vehicles with poor theft protection are placed into a higher group.

Thatcham breaks down cars with the following suffixes after a car's insurance group number:

E: Exceeds the security requirements for the type of car, so the insurance group rating has been lowered.A: Acceptable level of security for the type of car.D: Doesn't meet security requirements for the type of car, so the insurance group rating has been raised.U: Unacceptable standard of security. An insurer may insist on upgraded aftermarket security before they agree insurance cover.P: Provisional. Not enough data is available at the time of launch to classify the car. This will likely be amended once a new car has become available for Thatcham to evaluate.G: Grey import. Thatcham only tests cars that are officially sold in the UK, so unofficial imports (which are not brought to this country by an official importer or manufacturer) are only evaluated at a price that the insurer sets.

So, a group 8 car with an excellent security rating will be moved down to group 7, and rated as 7E. Conversely, a group 8 car with a poor security score will be moved up to group 9, and rated as 9D.

To further complicate matters, the groupings are a good rule-of-thumb, but insurers aren’t actually forced to follow the ABI guidelines that Thatcham sets. They can use their own judgement and experience to decide how much to charge customers. This could work in your favour, such as for enthusiast’s cars like a Mazda MX-5. But it can also add a premium loading for a model which is popular with irresponsible drivers - even though the two vehicles might be in the same insurance group.

This can hit young drivers especially hard - the few cars that a 17-year-old can afford to buy and run will have their insurance costs pushed up even further if an insurer has past experience of their chosen car being involved in collisions.

Therefore it’s important that insurance groups aren’t the only factor when choosing a new car. With price comparison sites it is now easy and free to obtain actual insurance quotes rather than simply comparing on insurance group alone, and you might be surprised how much two similar cars can differ on insurance costs. It’s also possible to find that you can afford the insurance on a car you may have thought was over your budget.

Your research should also look at the bigger picture, especially if you are a more experienced driver and insurance is a relatively small cost. It could be worth paying a few pounds more for your premium for a car that will save money elsewhere - with excellent fuel economy or lower maintenance, for example.

Want to know more about insuring your car? Why not read our complete guide to car insurance, or check out our 2019 Driver Power results for the UK's best car insurance companies.

Most Popular

Car dashboard warning lights: the complete guide
Tips and advice
1 Oct 2020

Car dashboard warning lights: the complete guide

2020 scrappage schemes: the complete guide
Tips and advice
12 Oct 2020

2020 scrappage schemes: the complete guide

New Volkswagen Golf GTI Clubsport gets 296bhp and racetrack mode
Volkswagen Golf GTI Clubsport prototype
Volkswagen
13 Oct 2020

New Volkswagen Golf GTI Clubsport gets 296bhp and racetrack mode