Car Insurance Groups
A large part of your car insurance premium is calculated based on the car that you drive. Each car is assigned an insurance grouping and prior to 2007 these insurance groups ranged from 1-20, this has now been expanded to 1-50. In most cases the lower the insurance grouping, the cheaper a car will be to insure.
The insurance group a car is given is determined using the following:
- The cost of parts and labour to return the vehicle to its pre-accident state after a 15KMPH impact.
- The new car cost and how much the settlement would be in a “total loss” claim.
- The performance of the car, including acceleration and top speed.
- The cost of parts from a list of 23 common parts.
- The cars security equipment.
Cars With Small Engines Have Lower Car Insurance Groups
Up until only a few years ago cars with a small engine would often have a lower insurance grouping and be cheaper to insure than cars with larger engines. However, with recent engine developments many car manufacturers are making smaller engines more powerful in attempt to reduce emissions. With these enhancements there are now cars with small engines that are as powerful as cars with much larger engines. You should always find out exactly what car insurance group a car has rather than estimating based on its engine size.
My Car Has A Low Insurance Group But My Insurance Is Still Expensive
The car insurance group is only a part of your car insurance premium, other factors such as your postcode can have a larger effect. Take a look at our car insurance postcode risk list to see if your postcode is seen as high risk by insurance companies.
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Multi Car Insurance Policies
If there are 2 or more cars at your address then a multi car insurance policy could save you money. Multi car insurance is growing in popularity and there are a number of providers that now offer it. Some insurance…
Read full articleShort Term Car Insurance
Temporary Car Insurance (Short Term Car Insurance) policies can be a good option when you need car insurance, but do not require a standard 12 month policy. When To Consider Temporary Car Insurance Short term car insurance may be sought in a…
Read full articleCar Insurance Fronting
Car insurance fronting is used by some young drivers to reduce their insurance costs. In most instances, car insurance fronting is when a parent insures a car in their own name (main driver) and adds a child as a named driver, despite the child being the main driver of the car.
Is Fronting Car Insurance Legal?
Fronting car insurance is illegal and will result in your policy being voided if your insurance company finds out. Fronting insurance can also prevent the accumulation of any no claims bonus and if your policy is cancelled it will make it difficult and expensive to get car insurance again.
Insurance prices have soared in recent years and with the average policy for 17-22 year olds costing just shy of £2,500 (in 2011) car insurance fronting may be a tempting gamble for some.
Why Does Car Insurance Fronting Save Money?
When a young drivers takes out a car insurance policy in their own name the insurance company views it that they carry 100% of the risk associated with that policy. When fronting insurance the majority of the risk will be placed on the main driver (the parent who is typically a lower risk than the young driver) rather than the named driver (the child). With the policy having a lower risk the insurance company will charge less.
Read full articleCar GAP Insurance
What Is Car GAP Insurance?
Car GAP insurance provides cover in the event of a total loss claim where the payout from the insurance company is less than either any outstanding finance, the original value of the car or the cost of a replacement car.
There are a variety of different types of GAP insurance cover available:
Return to Invoice (RTI) GAP Insurance (Back to
Invoice Gap Insurance)
This will cover the difference between the insurance payout and the
original invoice total. This usually has to be purchased within 3
months of owning the car.
Return to Value (RTV) GAP Insurance
This works in the same way as RTI GAP Insurance and is for people who
have owned their cars for over 3 months. The current value of the car
will be set at the time the policy is taken out.
Contact Hire GAP Insurance (Lease Gap Insurance)
This will pay the difference between the amount paid out by the insurer
and the settlement value due to the lease company.
Finance GAP Insurance
In the event of a claim, Finance GAP Insurance will pay the difference
between the amount paid out by the insurance company and the total left
on any finance or loan arrangements.
Replacement GAP Insurance
This will cover the difference between the amount the
insurance company pays out and the cost of buying a car of the same age
and specification again.
GAP Insurance – Is It Worth It?
Deciding whether GAP insurance is worth it is an individual choice. Let’s take a look at two examples:
If you buy a brand new car and plan to keep it for 3 years then RTI Gap Insurance may be considered. With this protection, if the car is a total loss in any of the 3 years of ownership you will still receive the original cost of the car.
- Original Cost of Car - £20,000
- Payout from insurance company in third year for total loss - £12,000
- GAP Insurance payout - £8,000
However, if you purchase a car and only intend to own it for 12 months GAP Insurance might not be the correct choice. A number of car insurance companies guarantee a full payout in the first 12 months of owning a new car so you may already be covered.
- Original Cost of Car - £20,000
- Payout from insurance company in first year for total loss - £20,000
- GAP Insurance payout - £0
Where To Buy GAP Insurance
GAP Insurance is regularly offered when purchasing a new or used car, however, the dealer is unlikely to provide the most competitive price.
It is often cheaper to go direct to an online GAP Insurance provider, so always shop around just like you would if you were buying car insurance.
Read full articleCar Insurance Excess - What is it?
Car insurance excess is the amount of money you have to pay in the event that you are deemed to be at fault for a car insurance claim. Your excess usually consists of a voluntary excess (this is something you can adjust when taking out a policy) and a compulsory excess (added by the insurer, this is usually higher for young and inexperienced drivers).
In most scenarios the car insurance company deducts any excess from the payout you will receive e.g if you have a £200 excess and make a £3,000 claim, the insurer will pay out £2,800. In some circumstances (such as when the party to blame is being disputed) you may be asked to pay your excess up front so your insurer can authorise the repair, they will then pay this back if it is decided you were not at fault.
Compulsory Excess And Voluntary Excess
Some car insurance policies have a compulsory excess which must be paid, whereas a voluntary excess only applies if the driver has chosen to have it added to their policy.
A compulsory excess is common with young and inexperienced drivers, with many drivers under 21 facing high excesses. This tends to comes down with age and drivers aged over 25 will often not face any compulsory excess.
A voluntary excess can be used to help reduce your insurance premium and to gain cheaper car insurance. By increasing the voluntary excess you will normally receive a cheaper quote, the downside to this is that in the event of a claim the voluntary excess in addition to any compulsory excess can work out to be expensive.
Car Insurance Excess Example
- Car Value: £1000
- Driver Age: 21
- Compulsory Excess: £250
- Voluntary Excess: £250
If this driver had a claim where they were at fault they would be faced with a total excess of £500 and would receive a payout of £500 (£1,000 - £500 excess).
Please Note: If you are making theft claim the insurance company will consider this to be an "at fault" claim.
It is always worth calculating what would happen in the event of a claim and whether it is worth having a high voluntary excess on a low valued car. Take a look at how you can use car insurance excess to get cheaper car insurance.
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