Car insurance is one of our biggest monthly outgoings and yet there are many things we don’t understand about it.

Firstly, it’s a legal requirement to have car insurance in the UK. Depending on your level of cover, it can protect you in the event of your car being stolen, vandalised, catching on fire or involved in an accident.

It also protects you in the event of your car causing any damage to third parties — i.e. other drivers, properties and members of the general public.

Demystifying car insurance groups

How much you pay for car insurance depends on many factors, namely which insurance group your car falls into. The higher the number, the more expensive your annual car insurance premiums will be.

How many car insurance groups are there?

There are 50 car insurance groups, listed from 1 to 50. If your car falls into a low number, it’ll be cheaper to insure than a car with a high insurance group. Most cars sit between groups 6 and 30, and this will generally cover family cars and everyday run-arounds.

What determines which group a car falls into?

The insurance group of a car depends on a number of different factors. They include:

  • The value of the car
  • The costs of parts and repairs
  • How easy the car is to repair and replace
  • Any safety systems installed on the car
  • Any security features fitted on the car
  • Bumper compatibility

A car’s performance is also taken into account. This is because cars with top speeds and accelerations are more likely to get into accidents. Faster crashes are also believed to generate more expensive insurance claims.

How much is car insurance?

According to the latest figures by Statista, the average annual cost for car insurance reached a five-year high in the third quarter of 2023 at £561.

Many things determine whether your premium will be higher or lower than this but the biggest factor is age. According to the same Statista report, those aged 20 and 75-years-old paid the most for insurance in 2022. For example, a driver who is around 20-years-old would have been charged roughly £850 whereas a driver in their 30s would have been charged an average rate of £639.

What impacts motor insurance rates?

As well as age, there are a number of factors that affect how much car insurance costs. They include:

  • The age and value of the car you drive
  • The insurance group of your car
  • Where you live
  • Where your car will be parked at night
  • Your expected annual miles driven
  • Your driving record including any no-claims bonus (NCB) and previous convictions
  • Details of any named drivers included on your policy
  • How much excess you’re willing to pay
  • Any driver safety add-ons including everything from anti-lock brakes to black-box insurance

Car Insurance: Myths and Facts

Car insurance facts and myths are aplenty. Here, we look at 10 facts about car insurance and car insurance myths and explain whether they’re true or false.

Now that you know more about car insurance facts and figures, you should feel more informed when shopping around for your policy. Our handy Smart Search tool also includes insurance groups to help you make a good decision. Shop for your next car here.