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How Your Car Affects Your Car Insurance Premiums

10 August 2022, 23:49 CET

Insurance companies take a lot of factors into consideration when calculating an insurance premium. They may look at your age, how long you have been driving, past claims, and whether you have penalty points on your driving licence. Besides all these factors, an important consideration is the car you are insuring, specifically the car's value.

Many people do not pay attention to this and end up with higher premiums without understanding the underlying reasons. In this article, we will look at how the value of a car is calculated and how the car and its value influence how much you pay for car insurance.

How The Value Of A Car Is Calculated

When applying for car insurance, it is common for the insurance company to ask you for the estimated value of the car. In some cases, they also calculate the value on their end, and they do this in a few ways.

They will start by looking at the make and model. Of course, different car makes and models have different values and they, therefore, need different levels of insurance. Next, the insurance company will look at a car's age and its mileage.

The age and mileage determine the tear and wear on the car. Cars that have a lot of tear and wear are a lot less valuable than those that do not have as much.

Mileage is important because the car may be old but might have only been driven a few thousand kilometres. Compared to a car that has done tens or hundreds of thousands of kilometres, the former has a lot less tear and wear.

The car's history will also determine its value. If it has had a lot of owners or been in a few accidents, both will affect its value.

The Value of The Car and Its Insurance Group

Cars belong to one of 50 insurance groups. Cars in group one are the cheapest cars to insure, with the cost increasing until you get to group 50. This is where you find luxury, high-end, and exotic vehicles, and some SUVs.

Some factors used to place cars into these groups include part availability, the value of new makes and models, performance, security features, safety features, repair costs, and repair durations. As cars get more expensive to repair, their premiums go up.

This can also happen to cheaper cars where parts are so difficult to find that the repairs end up being costly and take a lot of time.

Repairs account for more than half of all insurance costs in the UK, which means the repairs will not only determine the group the car ends up in but its premiums, too.

Security Features and Car Insurance Excess

In some cases, an insurance company will advise the owner of a high-end or expensive vehicle to add security features to the car. These features make it easier to recover if it is stolen and reduce liabilities and repair costs if the car ever gets into an accident.

The value of the car might also make an insurer ask the car's owner to pay a higher car insurance excess. Excess is the amount you pay towards any claims you make. For owners of costly cars, that excess might include both voluntary and compulsory excess.

The Value Might Not Be The Most Important Metric

Even though the cars' valuer is important for a valuation, insurers do consider other factors. For example, you might be a young guy driving an average car. Younger drivers are deemed to be a higher risk for insurance companies, and thus they will charge them a higher premium.

As you get older, the value of your car will be a bigger factor because the insurance will consider you a medium to low-risk driver as you have more experience on the road. This happens until you reach a certain age, at which point insurance companies start considering you a risk.

As we age, our eyesight can get worse, and our coordination and reflexes might not be as good as they used to be. This increases the risk of accidents, and insurance companies will adjust premiums accordingly.

Keeping The Cost of Insurance Down

Insurance is a fixed cost that car owners have to incur every month or year. Even though you have to pay for it, that does not mean it has to be expensive. There are certain things you can do to keep car insurance premiums low.

You can drive better, drive a less expensive car, increase your excess, make fewer claims and use car insurance comparison websites to find the best quotes. Quotezone is a great option because it allows you to compare quotes from over 100 car insurance providers in minutes. Once you find a quote you love, you can apply online or over the phone and complete the process much faster. Quotezone also allows you to compare numerous other types of insurance, so you get the best quotes for them too.


Car insurance is mandatory in the UK, and every driver should try to understand what dictates their premiums. Although there are other factors, the car you drive and its value are major considerations for car insurance companies.

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