When calculating your car insurance premium, insurers will look at:
- Your age and location: New or young drivers typically pay more for insurance than older drivers. If you live in an area with a high crime rate or a high number of road accidents, you’ll also pay more for cover.
- Your driving history: You’ll get cheaper car insurance if you haven’t made any claims on past car insurance policies, and you have a clean licence. A history of claims or motoring convictions will see your premium go up.
- Your car: This includes the make, model and trim, engine size, number of seats, modifications and security features.
When it comes to your car, the following will impact how much you pay for car insurance:
In general, the bigger engine your car has, the more your insurance will cost. That’s because drivers with powerful high-performance cars are deemed more likely to be involved in an accident. Large, powerful cars are also more expensive to repair or replace. Smaller cars with smaller engines are less likely to be involved in high-speed high-value crashes and will cost less to repair if they are.
Most insurers use industry-standard insurance groups. A vehicle’s insurance group is decided by the Association of British Insurers (ABI) Group Rating Panel, which includes members from ABI and the Lloyds Market Association. The panel uses data from Thatcham research and assigns new car models to an insurance group based on a number of factors.
A modification is any kind of alteration to a vehicle that wasn’t in the manufacturer’s standard specification, or wasn’t fitted as an option when the vehicle was made. Modifications normally aim to make a car go faster or look better. If you significantly increase a car’s power and performance, most insurers will see the vehicle as a higher accident risk and so you’ll pay more for insurance. Other modifications might make a car more tempting for thieves – so, again, you’ll pay more for cover.
Security features such as an alarm, immobiliser or tracking device can both reduce the likelihood that your car will be stolen and boost the chances of it being recovered, and returned to you if it is. Standard security features have got better over the years, with many new cars already having an immobiliser and alarm system fitted.