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Therapy session over car insurance

Martyn Hocking
2/ 6/2008

MOTOR insurers base their quotes partly on your age, experience and competence, and partly on the car you drive.

For the past 10 years they have been using a scheme that splits cars into 20 insurance groups to classify the risks associated with specific vehicles, but that has now changed.

The Association of British Insurers (ABI) has introduced a new system that splits cars into 50 groups (it will initially run alongside the existing the system).

The change reflects the fact that there are more types of vehicles on Britain's roads than ever before and it could affect somedrivers' premiums.

To help you minimise the effects of the changes - and keep your costs down - we have updated our Best Buys to help you find the best deals depending on your car type, the relative risk of the area in which you live and your age.

Our research shows that premiums vary considerably between providers and you can make substantial savings if you are prepared to shop around.

WHAT HAS CHANGED?

Under the new system, cars have been reassessed using several factors. These include the damage they are likely to do other vehicles and subsequent repair costs.

Driving a car with expensive components, such as catalytic converters and air-conditioning units, also affects the cost of replacement parts or repairs and this, too, will affect the cost of your insurance policy.

The new scheme also takes into account the size and weight of the car.

Large four-wheel drive vehicles, so-called `Chelsea tractors', are more likely to cause damage if they plough into another vehicle or a pedestrian, so are going to become more expensive to insure.

At the same time, smaller, lighter `city' vehicles, such as the Smart car, have been identified as presenting less of a risk and, therefore, should cost less to insure.

Top speed, overall performance and advances in technology also have an impact.

For instance, turbo diesels such as the Peugeot 407 and the BMW 5-Series have greater torque, which means they can achieve a sudden burst of power when travelling at lower speeds.

This could make them more expensive to insure.

QUICK CHANGE

As a result of the changes, some vehicles have been drastically re-rated. The Saab 9-3 Sports saloon is now in group 27, for example, six rungs higher in the rankings than a Land Rover Discovery 2.5 Td5 X.

Under the old system, both were in the same insurance group (13). Some cars have actually leapfrogged others as a result of the changes. Under the 20-group system, a 2005 Nissan Micra T2SX, for example, was in group 3 while the 2005 Seat Leon 1.4S was in group 4.

The Nissan is now in group 11, two groups higher than the Seat.

WHO BENEFITS?

Simon Kutner of insurer Royal & SunAlliance is a fan of the new system. He said: "The 50 groups enable us to consider risk more accurately. For instance, under the 20-group scheme a 1600cc Mini Cooper S and a 2495cc Jaguar X-Type Sport were both in group 15. Now we can differentiate."

If you are planning to buy a new car and insurance costs are an issue, you can check where it will sit in the new 50-group system by visiting the website www.thatcham.org/abigroup rating.