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Table of Contents
- Cover at a premium
- What are car insurance groups?
- Cheapest cars to insure
- Are second hand cars cheaper to insure?
- Cheapest cars to insure for younger drivers
- Cheapest cars to insure for the over-50s
- What are the most expensive cars to insure?
- How do modifications affect car insurance premiums?
- How to cut the cost of car insurance
Car insurance premiums are priced according to risk. That means the greater your risk of being involved in an accident, or your car being stolen, the more you’ll pay for cover.
It’s for this reason that some cars are more expensive to insure than others.
The vehicle you drive isn’t the only consideration insurers factor in when they assess your risk. Things such as how long you’ve held your licence, where you live and how many years’ no claims discount you’ve earned make a big difference too. That’s because they give a good indication of how likely you are to make a claim for an accident, fire or theft.
But your vehicle is still a major consideration – specifically, its value, security, safety and power tell an insurer how appealing it would be to thieves, how it would fare in the event of an accident and how fast it is capable of accelerating and travelling.
If you run a quote inputting the same personal details but with different models of car, you can see what difference it makes to the premium.
Cover at a premium
Expensive vehicles cost insurers more in pay-outs when they’re damaged and in need or repair or are written-off following an accident, and so they attract higher premiums.
Cars with advanced security features are harder to steal, which makes theft claims less likely – and so they benefit from lower premiums.
If your motor has a good safety profile – perhaps it has automatic emergency braking or other built-in safety features – then you and your passengers are less likely to be badly hurt.
Pay-outs for accidents sometimes need to cover expensive long-term medical care and rehabilitation. Safer vehicles lower the risk of this happening.
Finally, and importantly, vehicles with high top speeds and short acceleration times are proven to be more often involved in claims than less powerful motors. Whether it’s the kind of driver these vehicles attract or the fact that they’re so powerful, statistics tell insurance providers they represent a higher risk, and so they price premiums accordingly.
What are car insurance groups?
Premiums aren’t tailored to each individual car. Instead, cars are assigned to one of 50 car insurance groups according to their value, security, safety and power. The group your vehicle belongs to determines the risk it poses which affects its insurance premium.
Your vehicle’s grouping is determined by a panel that includes the Association of British Insurers (ABI), Thatcham Research and Lloyds Market Association. They judge your vehicle across various categories including performance, safety, value, security and parts & repairs, and assign it to a group.
Cheapest cars to insure
There are a myriad of other factors that dictate how much you pay for cover, but all things being equal, it’s best to choose a vehicle from a lower car insurance group if you want to keep costs down.
Cars in group one, which includes the likes of the Volkswagen Up, Vauxhall Corsa, and the Nissan Micra (2017 onwards), are among the cheapest cars to insure.
Group 2 cars include the likes of the Seat Ibiza and Ford Fiesta (both 2017 onwards), while group 3 is home to the Dacia Sandero and Hyundai i10.
But it’s important to remember that your vehicle is only part of what makes up your premium. Two VW Up owners won’t pay the same premium just because they drive the same vehicle. One might live in an area where theft claims are higher than the other, or one driver could have earned a greater no-claims discount than the other, and this will be reflected in the prices they pay.
But in terms of the car itself, the cheapest to insure will be from the lower car insurance groups.
Are second hand cars cheaper to insure?
The value of a used car is less than it would be if you were buying the equivalent brand new and straight from the forecourt. And this lower value can reduce the car insurance premium you would pay.
But again, the car’s value is just one of many factors that determines the cost of insurance.
The type of car (irrespective of whether it’s new or second hand) as well as your age, driving record, and personal circumstances all play major roles in determining the cost.
Cheapest cars to insure for younger drivers
If you are a driver aged between 17 and 25, it’s especially important to choose a car from a low car insurance group. That’s because younger drivers foot the very highest premiums due to their lack of driving experience and associated high risk to insure.
According to data from car insurer Admiral (June 2022), the cheapest cars to insure for young drivers in the 12 months to May 2022 (where it insured at least 50 of the model) were as follows:
- Austin Mini
- Rover Mini
- KIA Stonic
- Renault Kadjar
- SEAT Arona
- Mazda CX-5
- Volkswagen T-Cross
- Volkswagen up!
- SEAT Mii
- Škoda Citigo
Cheapest cars to insure for the over-50s
When you hit 50, you can usually expect to pay less for your car insurance.
Often with several decades’ driving experience under your belt, and even a build-up of a long-term no-claims bonus, it stands to reason that over-50s car insurance will be cheaper on account of the lower risk these drivers present.
Nevertheless, choosing a car from one of the very lowest car insurance groups, such as those outlined above, will push down costs further still. You can find other ways to reduce the cost of car insurance, below.
What are the most expensive cars to insure?
The most expensive cars to insure – all luxury top-end cars with huge price tags, enormous engines and top of the range technology – fall into the very highest car insurance groups.
One example, in car insurance group 50, is the Corvette Stingray. With prices starting at around £81,000, the luxury sports car comes with a 6.2 litre V8 engine and is capable of reaching 60 mph in under 3 seconds.
Other examples of cars in insurance group 50 include the Audi A6 and the BMW i8 and Jaguar XE.
How do modifications affect car insurance premiums?
Performance-enhancing modifications must be declared to an insurer when you apply for cover, because a souped-up vehicle from group one could, for example, have the top speeds and acceleration of a group-five motor.
The best way to make sure you get the lowest possible premiums for the cover you need is to use a comparison service to search the market. Low premiums are great, but not if they fail to provide adequate cover. A good comparison service will help you strike the right balance between protection and price.
How to cut the cost of car insurance
As well as choosing a vehicle in a low car insurance group, there are other tangible ways of keeping the cost of your car insurance down.
Firstly, when your car insurance policy comes up for renewal, don’t just accept your current insurer’s renewal quote.
Although from January this year, the Financial Conduct Authority (FCA) ruled that insurers will no longer be allowed to charge existing customers more for their renewal than they’d charge a new customer for the equivalent policy, you may still be able to get a better deal at a different insurer. And it costs nothing to check on a comparison website.
Paying your premium upfront, if you are able, rather than in monthly instalments will also create a saving, since insurers charge interest on what is essentially a loan you take out when you choose to spread the premium payments.
Increasing the amount you’re willing to pay in voluntary excess towards the cost of any claim you make can also drive down premiums. But keep in mind that this is on top of your policy’s compulsory excess. Make sure the total excess is affordable.
