All new and used cars in the UK are placed into car insurance groups which play a major part in determining your insurance policy premium, the system is set up and monitored by the Association of British Insurers (ABI). There are currently 50 different groups reflecting the wide range of vehicles available. When the system was first introduced back in the 1970s, there were only nine available classes, but this expanded to 20 by 1992, and then to the current number in 2006. All cars registered in 1996 or later are now placed into one of these 50 groups, while earlier vehicles are placed at an insurer’s own discretion.
A car’s insurance group is determined by a range of factors, not least power, safety, value and repair costs; a combination of these is used to determine a vehicle’s group, and this can vary widely even for the same car based on different specifications, engine sizes, security kit and much more. It’s not uncommon for the same overall model of a car to feature in a dozen or more groups based on individual trim and specification. Of course, this grouping is not the only factor used to determine car insurance policy costs – these can include where a vehicle is kept, your postcode, vehicle age and value, any additional security features added, and annual mileage.
Most common UK cars will fall into a relatively low numbered group, but this can vary depending on the exact model and trim. The Ford Fiesta for example fits into numerous bands from 3 to 15 in the main, but high specification and high-powered examples can be as high as 31 on the list! Most common small or family cars will be in groups under 20, but again this will vary depending on badge, power and specification.
One key component in determining group is the cost of repairs after an accident, and how much damage a vehicle would sustain. Thatcham, a vehicle security company, works alongside the ABI to carry out crash tests and damage estimates. The resulting group can vary depending on such factors as the engine size and performance, the availability and cost of common parts used in repairs, the cost of labour and parts to repair a vehicle after an accident, and the vehicle’s list price. The motor trade has a key role to play in this by providing the cost of parts to assist in their work.
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The vehicle’s standard security features also help in placing a vehicle in a group. As technology advances, many vehicles are now fitted with excellent driving aids such as collision mitigation, lane departure warnings and better vehicle security to prevent both accidents and theft. Thatcham will use these features to assist in grouping each vehicle.
Insurers can also use additional social factors in determining insurance premiums – for example, a “hot hatch” version of a vehicle that has much faster acceleration or top speeds than a standard model will attract a higher premium, as will cars more likely to be driven by younger drivers. It’s always worthwhile doing all your research before test driving a vehicle on trade plates or committing to a purchase, as you may be surprised by how high or low the premium is.