How Do Car Insurance Groups Work?

You almost certainly know how much your car insurance costs, usually because paying for it leaves you slightly traumatised (or is that just me?). There are many factors that determine the cost of your insurance, the biggest being you –  your age, driving experience and no-claims bonus. After that the next biggest factor in your insurance cost is the car you drive or, more importantly, which car insurance group it fits into.

You might not have realised that the insurance groups used to categorise cars were changed in 2007. Where there used to be twenty groups there are now a staggering fifty, with group 1 representing the cheapest to insure and group 50 only available to winners of the Euro lottery or premiership footballers.

What group a car falls into is decided by the mysterious Group Rating Panel. This panel includes members from the Association of British Insurers (ABI) and Lloyds Market Association (LMA) and meets on a monthly basis. They use a number of sources of information to decide which group a car firs into, although the majority (around 70%) is gathered by the Motor Insurance Research Centre, better known as Thatcham.

Factors that affect how a car is rated include the value of the car, performance, safety features and repair costs.

Expensive cars sit high in the group simply because they are expensive to repair in the event of an accident.

High performance cars are more likely to be involved in accidents and, if they are, will be more costly to repair due to their expensive components. They are also attractive to car thieves, another factor that pushes them higher into the groups.

The more safety features a car has the lower it sits in the groups. If the occupants of a car are less likely to be injured there is less risk that the insurance company will have to cover expensive hospital treatments.

Repair costs are also a big factor, as this affects the insurance company for all claims, big or small. Some cars are more expensive to repair than their rivals because parts are shipped a long way, can be difficult to get hold of, or are made from expensive materials.

So what sort of car fits into Group 1? Think along the lines of cheap, base spec, low performance and popular. Typical examples would be a 1.0-litre Vauxhall Corsa or a 1.1 Fat Panda, both of whom are cheap to buy and quite slow.

At the top end of the scale, in group 50, sits the likes of the rare and expensive Ferrari Enzo. Extremely valuable and made of expensive carbon-fibre, if an Enzo gets crashed it’s going to cost a lot of money to repair.

Here at Driving Spirit we love hot hatches, and if you’ve made the decision to buy one of these little beauties you’re going to have to accept that your insurance is going to be higher than average. Take it on the chin, you’ve decided to buy a performance car and the insurance companies are expecting you to total it within five minutes of leaving the showroom. So how do new hot hatches compare when it comes to insurance?

You can see how price and repair costs affect cars when you look at the VAG clones – the Audi A1 TFSi, Skoda Fabia vRS, Seat Ibiza Cupra and Volkswagen Polo GTI. They are almost identical in terms of performance, thanks to their shared mechanicals, and yet their insurance groups vary from just 27 for the Fabia to 30 for the Polo.