UK Insurance groups explained

A few months ago I made the mistake of buying a used car without first determining which insurance category it fell into. This oversight meant that I was actually paying more for the insurance premium than I had paid for the car itself!

Although factors such as age, driving history, convictions and no claims bonus all go towards determining the cost of your insurance premium, it is often the car’s make, model and modifications that are of most importance.

And it’s also worth knowing that, as of January this year, the old 1-20 groupings were replaced by a more comprehensive groupings system that banded cars from numbers 1-50, one being the lowest and 50 being the highest and most expensive group.

The new groupings are on the recommendation of Thatcham, the motor insurance repair centre, who have claimed that the old banding system was too narrow to reflect cost of repairs to modern vehicles given the number of modified and crossover models available.

The general rule of thumb is that a car’s new banding will be around double what it’s old banding was, so if you have a car that was between groups 4 and 6 under the old model, it will probably now fall somewhere between groups 10 and 16.

If this is the case then there should be little or no change to your insurance premium but if your car’s new grouping is considerably more than twice what it’s old grouping was then there’s a good chance your premium will increase.

Similarly, if it is less than double what it’s old grouping was then you should see a reduction in the cost of your policy.

But, despite the new system, the criteria for these groupings has remained pretty much the same so below is a breakdown of the factors considered when defining a car’s grouping.

Value – the higher the value of the car, the higher it’s grouping will be. This is because the grouping system looks at how much it will cost to replace the vehicle should it be written off.

Parts – insurers also look at the likelihood of damage to parts and the cost of replacing parts. So a more reliable car with cheaper component parts will usually be in a lower group.

Repairs – a longer repair time equates to a higher grouping. So this means that if you have a car with parts that are difficult to come by or take a long time to repair then it’s likely that the car will fall into a higher insurance group.

Performance – high performance vehicles are thought to be more of an insurance risk, as statistics show that those with a greater acceleration or higher top speed are involved in more insurance claims.

Security – many new cars now come with insurance approved security devices but cars that have after market, Thatcham approved, devices such as trackers can generally be placed in a lower group. Insurers also individually band cars according to the level of security devices they have, for more information on these bandings click here.

But whilst it’s useful to have these facts to hand, the best way to ensure that you can afford the insurance before you commit to buying the car is by doing some online research and comparing prices on websites such as Moneysavingexpert, Tesco compare or Moneysupermarket.

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