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How car insurance groups affect car insurance premiums

If you're looking to save money and get a cheaper car insurance premium, it's worth thinking about the insurance group your car is in. For instance, cars in lower insurance groups attract a lower premium. Car insurance groups are set by the Group Rating Panel, which includes members of the Association of British Insurers (ABI) and Lloyds Market Association (LMA).

Group Rating System

The Group Rating Panel is administered by the Motor Insurance Repair Research Centre (Thatcham Research). It meets to assign new car models to an insurance group from 1 (cheapest to insure) to 50. Cars in the highest groups, typically high performance models, are likely to cost insurers the most in insurance claims. Insurers may use the panel's recommendations in their calculation of car insurance premiums, or they may choose to use their own groupings. According to the ABI, the cost of motor vehicle repairs accounts for over half of all the money paid out in motor insurance claims, so repair costs feature strongly in how the groups are defined. Based on its research, Thatcham defines the factors used to assess new cars as follows.

Damage and parts costs

This covers the likely extent of damage to each car model and the cost of the parts involved in its repair. The lower these costs, the more likelihood there is of a lower group rating.

Repair costs and times

Longer repair times mean higher costs and the greater likelihood of a higher group rating. Different paint finishes on modern cars are an important factor, so these are also taken into account.

New car values

The prices of new cars are taken into account, as they are often a good guide to the cost of replacement and repair.

Parts prices

A standard list of 23 common parts is used to compare the cost of parts from one manufacturer with those from another. The lower these costs, the more likelihood there is of a lower group rating.

Car performance

Acceleration and top speed are important factors. Insurers know very well, from their claims statistics, that high performance cars often result in more frequent insurance claims.


An Autonomous Emergency Breaking (AEB) system can help reduce low speed front to rear accidents, therefore cars fitted with AEB as standard will have a lower insurance rating.

Bumper Compatibility

The standard of front and rear bumpers affects how cars perform in a front to rear accident. Cars with bumpers that are compatible with the insurer's criteria qualify for lower insurance ratings.

Car Security

Security features fitted as standard equipment by motor manufacturers can help to reduce insurance claims costs. Such features include high security door locks, alarm or immobilisation systems, glass etching, coded audio equipment, locking devices for alloy wheels, and a visible Vehicle Identification Number (VIN).

Article Source - The AA -