Car Insurance Groups Explained

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Ever wondered how car insurance groups impact the price quoted by providers? Read on to discover everything you need to know about The Group Rating System, developed by Thatcham Research.

What are insurance groups?

Each vehicle on the road belongs to an insurance group, which range from 1-50. The lower groups (those closer to 1) tend to house cars which are cheaper to insure, while higher groups (nearer the 50 mark) are likely to be more costly.

So, what determines a car’s grouping?

According to the Association of British Insurers (ABI), repair costs make up for over 50% of the money paid out in vehicle claims. So, cars which are premium built often land in higher insurance groups and come with bigger premiums. But there are some other factors that also play a part.

What factors determine a car’s group?

  • Damage and parts costs
  • Repair costs and times
  • New car values
  • Car parts prices
  • Performance
  • Safety
  • Security

To highlight how each one of these factors affects the cost of insurance, let’s take a look closer at each one using two completely different vehicles. Our lovely volunteers include the Nissan Micra and Ford Mustang.

The entry-level Micra has a 99bhp 1.0-litre turbocharged petrol engine which lands it in groups 8 and 9, depending on the trim level you choose. On the other hand, the entry-level Mustang has a 270bhp 2.7-litre petrol EcoBoost which will fall in group 41-43. This will depend on whether you choose a convertible or coupe model.

Damage and parts cost

The likelihood that you will damage your car and the cost of the most common parts of the vehicle are evaluations the insurer makes before quoting your premium.

Comparing the cost of two equipment packs for the Mustang and the Micra gives an indication as to why insurers quote a different premium for the two.

For example, the Vision+ Pack for the Micra is a £600 top-end extra available, adding intelligent around view monitoring, moving object detection, rear parking sensors and blind spot monitoring.

The Mustang has a similar option which upgrades its equipment, called the ‘Custom Pack’, priced at £1,565. It adds a B&O 1000W 12-speaker sound system, satnav, climate-controlled seats and a partial-leather wrapped centre console.

Repair costs and times

Different cars are built with different structures by each manufacturer. For this reason, more complex builds – especially those with additional components – will take longer to repair than others.

You’ll notice that cars with more complicated chassis’ and other components will be within a higher insurance group due to the time and money it takes to repair them, should you be involved in an accident and need to claim.

Using the Mustang and Micra interior styling as examples of a typical repair cost, there’s a clear disparity again. This is the case even between the premium ‘Invigorating Red’ interior pack for the Micra and single upgrade option for the Mustang, the Recaro seats draped in Ebony Leather.

The former will set you back £1,400, while the latter is £1,700. But it’s not just a case of cost, either. If you take a look at the design of the two cars, it’s easy to see that access for a mechanic is going to be a lot easier in the Nissan than the Ford, meaning less time will be needed for repairs. The wide-opening four door design differs massively from the low-set body of the ‘Stang, which only has two doors.

New car values

The retail price of a new car (or any car for that matter) is a good guide for insurers to gain an understanding of how much they would need to pay out in order to replace or repair it.

Integrated technologies in more expensive vehicles has driven up the cost of repair work, which makes up the majority of money paid out on claims. However, you’d be wrong to think that purchasing an older car would automatically lower the cost of your policy. Sometimes car parts for motors of the past can be difficult to source, which can also mean result in a higher price being quoted.

Going back to our examples, the Mustang and Micra, you can pick them up new for approximately £38,000 and £14,000, respectively. The price accurately reflects the standard equipment of the two also, which is a lot more advanced on Ford’s model and explains the difference between their insurance groups.

Car parts prices

Insurers tend to use 23 common replaceable parts as a base comparison across all manufacturers in order to determine a rough average cost of new parts if an accident should happen. Choosing a more premium brand of car is likely to result in your insurance quote being higher because their parts will be more expensive to replace in a claim.

Consider brake pads, for example. They need to be replaced every 30,000 miles or so and, while replacement prices will differ depending on which garage you use, we can give you an indication as to the difference in cost.

Going back to our lovely examples, according to the online car parts market, a Micra’s front and rear pads are worth £58, with the Mustang coming setting you back £140. This is no doubt to do with its more enhanced performance brake system.

Performance

The most obvious disparity between the Mustang and Micra. How a car performs – particularly in terms of acceleration and top speed – will have a massive impact on how much you’ll pay for your insurance.

If a car is fast off the mark and can go from 0-60mph like a bat out of hell, an insurer will deem your case as a higher risk than if the same acceleration took you 13 seconds. Something to bear in mind when you’re choosing your next car – better performance or better premiums? These figures for the Mustang and Micra will put things into perspective, for sure.

  • Micra: Acceleration (0-62mph in 16.4 seconds), Top Speed (98mph)
  • Mustang: Acceleration (0-62mph in 6.4 seconds) Top Speed (145mph).

Bumper compatibility and safety

Having a bumper which fits an insurer’s criteria isn’t a game-changer, but it will have some say in which insurance group your car falls into. Certain manufacturers are renowned for having sturdier build materials. The Euro NCAP standard safety test will pick up on this and give those cars with solidity four and five-star ratings.

So, if you’re looking to save on insurance, be sure to check out your car’s safety rating. Cars with advanced driver assistance systems (ADAS) installed such as lane-keeping and emergency brake assist will also fall under a low insurance group.

While most premium car brands are fitted with great safety tech as standard, this doesn’t always ring true when it comes to high-performance cars. However, lots of entry-level hatchbacks are scoring better safety ratings and therefore landing in lower insurance groups. This is shown quite clearly with the Mustang and Micra.

  • Micra Euro NCAP rating: five stars
  • Mustang Euro NCAP rating: two stars

Security

The more security features a car has the better, especially as far as insurance costs are concerned. Alarms and immobilisation systems are things to keep a keen eye on when you’re deciding on your next car.

Most modern cars feature central locking and perimeter alarms which make theft less likely. Seeing this will put a provider’s mind at rest when it comes to determining the risk level of your case, resulting in a lower insurance group and therefore cheaper premiums.

Similar to safety, the Micra is the clear winner of the two – featuring a superior Thatcham alarm system to the Mustang (category 2 immobiliser compared to category 1 alarm). Again, this is another contributing factor to the disparity in insurance groups between the cars.

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