UK car insurance groups explained: what do they mean for you and your car?

Car insurance premiums can be one of the more expensive elements of owning a car, but they are also entirely necessary as driving without valid insurance is illegal. Fortunately, there are steps you can take to reduce those dreaded insurance quotes, such as owning a car in a low insurance group. Car insurance groups are determined by the Association of British Insurers. They take steps to rate individual cars for their risk levels and then give them a group rating from 1 to 50. 

Of course, your car isn’t the only factor taken into account by insurers when calculating your car insurance quote. You as an individual and your circumstances are all taken into account, too. Your age, driving experience, where you park, and where you live are just some of the many contributing factors to how much you'll pay, although driving a car in a lower insurance group will help keep costs down right from the start.

What are car insurance groups?

Car insurance groups are one of the more straightforward tools the insurance industry uses to set your premiums. They were first introduced in the 1970s, to help simplify the process of getting quotes, and to help the industry judge the risk involved when setting premiums.

Insurance groups are fixed independently of the car manufacturers, and are based on assessments by the Association of British Insurers (ABI) of how easily and cheaply repairs can be carried out after an accident, and the level of vehicle performance as an indicator of the potential for having the accident in the first place.

The original group ratings were from 1-20, but since 2009 the broader insurance group ratings of 1-50 have been used. That means there’s scope to award different ratings to different specs and trims within model ranges. If you want a good illustration of what that can mean, consider the BMW 1 Series line-up, which starts at insurance group 19 for the basic 1.5-litre petrol five-door, but shoots all the way up to insurance group 36 for the sporty M135i. As you would expect, the higher the insurance group rating, the higher your premium is likely to be.

How are insurance groups calculated?

The ABI works in conjunction with Thatcham to compile the insurance classifications for UK cars. 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 experts factor in a number of points when setting an insurance group, including:

• Parts availability and price: For repair purposes, Thatcham uses a list of 23 commonly damaged parts for pricing, in the same way the Treasury's basket of goods is used to calculate inflation.
• Performance: The manufacturer-quoted 0-62mph acceleration figure and top speed of a specific car are taken into account.
• Repair costs: Thatcham performs its own low-speed crash tests (chiefly a 15km/h impact) and engineers determine the cost of parts and labour to return a car to its pre-accident condition.
• Price when new: The vehicle list price is used to calculate the cost of a settlement if the car is written off.

Data for these comes from Thatcham's own tests, although in the case of parts and labour these prices are sourced directly from the vehicle manufacturer.

Once all of these factors are taken into account, Thatcham then classifies each new car into one of the insurance groups, and then a security rating is given. At the top end, cars with excellent security features can move into a lower insurance group, while vehicles with poor security are placed into a higher group and therefore the cost of insurance is increased.

What else determines a car's insurance group?

According to the New Vehicle Security Assessment programme, theft is still one of the chief reasons for an insurance claim, so the security of a vehicle will qualify it for a lower insurance premium. Thatcham breaks down cars with the following suffixes after a car's insurance group number:

• E: Exceeds the security requirement 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 to cover the vehicle.
• 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 imports are only evaluated at a price that the insurer sets.

As mentioned above, security ratings can increase or decrease a car's overall insurance group. 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.

Another way for a car to improve its insurance group rating is by offering a high standard of safety. If autonomous emergency braking is fitted as standard, for example, 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.

Manufacturers play a further part in determining insurance costs. 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. Different versions of the same car will also be in a range of insurance groups, as engine performance and trim level affect premiums. 

Different versions of the same car will also be in a range of insurance groups, as engine performance and trim level affect premiums. A base level Ford Fiesta Trend fitted with the 1.0-litre 94bhp EcoBoost engine is in group 10, but the same car in ST-Line X trim with the 138bhp 1.0-litre EcoBoost engine is in group 15.

How do insurance groups affect me?

Broadly speaking, the higher the insurance group, the more expensive insurance will be. You can check out the cheapest cars to insure here - these are all cars with a rating in group 1-4, so should be affordable to insure.

However, it’s not quite as simple as that. Insurers aren’t bound to follow the ABI guidelines that Thatcham sets, and will use their own judgement and experience to decide how much to charge customers. For example, a stereotypical ‘boy racer’ car will attract a higher premium than one that’s more staid and sensible – even though the two vehicles might be in the same insurance group.

This can hit young drivers especially hard - with cars that a 17-year-old can afford to buy and run very likely to have their insurance costs pushed up even further. This occurs because the insurer will have past experience with these cars being more frequently involved in collisions.

That's why it’s important that insurance groups aren’t the only factor when choosing a new car. Be sure to obtain actual insurance quotes rather than simply comparing insurance groups - you might be surprised how much two similar cars can differ on insurance costs. As with many things, the most effective thing to do here is to research thoroughly. It could be worth taking a small hit in terms of insurance cost for a car that will save money elsewhere - with excellent fuel economy, for example.

What cars are in the lowest insurance groups?

As you might imagine, it’s the small cars that are cheap to buy and repair that populate the lower car insurance groups in the scale. In group 1, you’ll find models like the Kia Picanto, Nissan Micra and Hyundai i10, but it’s crucial to remember that insurance group placement is determined according to the specific model, engine and trim level you’re buying. While the cheapest, least powerful Volkswagen Polo might be in insurance group 1, the more expensive, better equipped and faster models that you’ll encounter as you climb the range will be in progressively higher groups attracting bigger insurance costs.

What cars are in insurance Group 50? 

Bearing in mind that it’s cheaper cars in the lowest insurance groups, there are no prizes for guessing the kind of cars in insurance group 50. Top end luxury saloons, SUVs and sports cars get the top insurance grouping but owners of cars such as the Bentley Bentayga, Audi R8 and Mercedes-AMG GT will probably have the cash to shoulder the extra insurance burden. At the very top end of the market, owners of exotic supercars from Ferrari, Lamborghini and even more exclusive brands will often employ the services of an insurance broker to help keep the cost of insurance in check.

Let us take the effort out of searching for cars in low insurance groups. Read our list of the cheapest cars to insure in the UK and compare personalised car insurance quotes with our tool..