For anyone buying a new car and thinking about the financial implications of their decision, the actual price of the vehicle is important, of course – but running costs are key, too.
Will you have to cough up a fortune to have it serviced? What is the annual road tax? And perhaps most importantly: how much will insurance set you back?
Vehicles are banded into insurance groups, which give an indication of whether they will be cheap or expensive to insure.
There are 50 of these groups, set by the Group Rating Panel – members of the Association of British Insurers and the Lloyds Market Association – and every car on the market falls into one.
The lower the car’s denoted group, then the cheaper it will be to insure, theoretically.
The panel decides which cars fit into each group based on a range of factors.
First and foremost, the car’s value as new is considered, which gives an indication of how much it will cost an insurer to repair or replace.
The repair cost is one of the biggest influencers on insurance categories as it accounts for a large proportion of the money paid out in the event of a claim. The prices of the 23 most common car parts for that model are taken into account to work this out.
Performance also affects a car’s insurance group. The owners of higher-powered models that reach greater speeds are more likely to make claims, and so belong in the upper groups.
Finally, the vehicle’s security measures are assessed. The categories of E, A, P, D and U denote the vehicle’s standard of security – with E being ‘exceeds’ and U, ‘unacceptable’. The higher the security standard, the lower the car will cost to insure.
So which cars are cheapest to insure?
According to insurance comparison site uSwitch, the below models boast the lowest insurance premiums.
1) Toyota Yaris
2) Kia Rio
3) Renault Twingo
4) Vauxhall Corsa
5) Volkswagen Up
6) Hyundai i10
7) Seat Mii
8) Dacia Sandero
9) Skoda Citigo
10) Ford Ka
While these are theoretically the cheapest cars to insure, a number of other factors also come into play. The driver’s age, experience behind the wheel, location and even profession can affect a policy premium. Luckily, there are a number of handy – and completely legal – tricks that can help to drive that price down.
Car insurance tips
Gone are the days when adding another, more experienced driver to your policy would push the price down, and in fact insurance professionals tell us that adding further drivers can now lead to higher quote.
Just as a car’s insurance group is based on a number of factors, the driver is assessed on others.?
As mentioned above, there are the unavoidable facts, including age, where you live, driving record, and any previous claims.?
Others, however, are not as set in stone.
When comparing insurance policies, think long and hard about which level of cover you need. The basic option of third party only is generally the cheapest (though not always), but only covers other people and their vehicles involved in the claim, and not yourself.
? Third party, fire and theft is the intermediary option, which adds protection if your vehicle is stolen or set alight.
Finally, a fully comprehensive policy covers any other drivers and yourself.
The higher your voluntary excess will, in general, make for a lower premium, as the insurer will have to pay out less in the event of a claim. Pay attention though to the compulsory excess that the insurer may impose. This will be added to the excess you have specified, and could lead to you having to cover most of the claim yourself.
If your car does not feature a particularly high level of security, you can cut the cost of your insurance premium by installing aftermarket security devices. Even a steering wheel lock can make a difference.
Reducing your annual mileage will see a reduction in your insurance, too. The fewer miles driven, the less chance you have of being involved in an accident. However, be truthful about how many miles you plan to cover, as if you have an accident after 8,000 miles, when you only specified you’d drive 2,000 in that year, your policy could be invalidated.
Finally, where you park your car affects your insurance. Insurers see a lesser chance of theft if you leave your vehicle in a garage or on a driveway. Even if there is nowhere immediately next to your home or workplace, investing in a spot in a secure car park is one way to get around leaving your pride and joy on the road.
Hopefully you now have a better idea of how insurance works, and how your vehicle choice can affect your premium.
Check out our helpful guide on buying a new or used car to get you on the way to buying your low-insurance model.