Car insurance groups and how to cut premiums

Thatcham Research assesses every new car model on damage and repair costs, the cost and availability of parts, performance (0–60 time and top speed), security (locks, alarms, immobilisers), and safety features that reduce damage in a crash, such as autonomous emergency braking. That data goes to the ABI Group Rating Panel, which sets the advisory group.

Thatcham has announced that the 1–50 Group Rating system is being replaced by a more detailed Vehicle Risk Rating model, so you may start to see insurers and car sites refer to that instead.

Cars in group 1 tend to be small, low-powered models with cheap, widely-available parts. Cars in group 50 are typically high-performance, high-value cars with expensive panels and bespoke parts.

Beyond the group: your age and driving experience, the postcode where the car is kept overnight, your annual mileage, occupation, number of years of no-claims discount, the type of cover (third party only vs comprehensive — comprehensive is often cheaper because the people who take it on tend to claim less), voluntary excess, and use of telematics (a 'black box').

Modifications (engine remap, suspension, wheels, exhaust) must be declared. Failing to declare can give the insurer grounds to refuse a claim.

Since 1 January 2022 the FCA has banned 'price walking' — the practice of charging existing customers more at renewal than equivalent new customers for the same risk. Insurers must offer existing customers the same price they would offer a new customer with the same circumstances.

Always still shop around at renewal. Comparison sites cover most major insurers but not all: NFU Mutual isn't on them, and Direct Line's online-only car policies are listed only on Compare the Market — so get quotes from insurers like these directly.

Choose a car in a lower group; pay annually instead of monthly to avoid interest; increase your voluntary excess (but make sure you can afford it after a claim); add a named driver who is a more experienced motorist (but never put them as the main driver if they are not — that is 'fronting' and is insurance fraud); reduce your stated annual mileage to your real figure (don't over-estimate to be safe — pay for the mileage you actually do); fit an approved security device.