Red Cars: Insurance Premiums Higher?

It is a common misconception that red vehicles are more expensive to insure. In reality, insurance companies do not consider the colour of a car when calculating premiums. Instead, they are more interested in factors such as the make, model, age, location, usage and driving record of the driver. While red cars are not more expensive to insure, custom paint jobs may be seen as custom parts or equipment and could increase insurance premiums, though only by a small amount.

Red car insurance cost is a common myth

It is a common misconception that red cars are more expensive to insure. While 44% of Americans believe that owning a red car increases insurance premiums, this is false. Insurance companies do not consider the colour of your car when calculating your premium. Instead, they are more interested in the make, model, and trim level of the car, as well as its age, location, usage, and your driving record.

The myth that red cars are more expensive to insure may be due to the perception that people tend to want to drive faster in a red vehicle. However, there is no evidence to support this claim, and insurance companies do not take the colour of your car into account when determining your premium. In fact, many insurance companies, such as Progressive, do not even ask about the colour of your car when providing a quote.

Another factor that may contribute to the myth is the belief that red cars are more likely to be pulled over by the police. However, there is no conclusive data to support this claim. While some studies indicate that certain car models are more likely to be pulled over than others, it is the driver's behaviour that is the primary factor in being pulled over, not the colour of the car.

It is worth noting that while the colour of your car does not directly affect your insurance rate, a custom paint job may be considered as custom parts or equipment by insurance companies, which can increase your premium slightly. Additionally, the colour of your car may have an indirect impact on your insurance rate if it is a factor in determining the make and model of your car, as different makes and models have different insurance rates.

In conclusion, the idea that red car insurance is more expensive is simply a myth. While it is true that certain factors can increase your insurance premium, the colour of your car is not one of them. So if you're considering buying a red car, you can rest assured that the colour alone will not impact your insurance costs.

Insurance companies consider other factors

The colour of a vehicle is not a factor that insurance companies consider when calculating insurance premiums. However, several other factors come into play when determining the cost of insurance. These factors are based on objective data and include the following:

Vehicle Information

Insurance companies will ask for details about the vehicle, such as its make, model, trim level, and vehicle identification number (VIN). The make and model of a car can impact insurance premiums as certain vehicles are more expensive to insure than others. For instance, high-performance cars are more likely to be involved in speed-related accidents, and luxury cars tend to cost more to insure. The age of a car also matters, as older cars may lack modern accident-avoidance technology, making them riskier to insure.

Driving Record

An individual's driving record is a significant factor in determining insurance rates. Safe drivers with no history of accidents or traffic violations are considered lower-risk and are therefore rewarded with lower premiums. Conversely, drivers with a record of accidents or traffic tickets are seen as more likely to cost the insurance company money and will typically pay higher premiums.

Location and Usage

The location where the vehicle is garaged and the purpose for which it is used also influence insurance rates. Insurance companies consider the risk of theft, vandalism, or damage based on the vehicle's location. Urban areas with higher population densities tend to have higher rates of vandalism and theft, resulting in increased insurance premiums. Additionally, driving during rush hour or accumulating a high number of miles can increase the likelihood of an accident, which is reflected in the insurance costs.

Personal Information

Personal factors such as age, gender, marital status, and occupation can also impact insurance rates. Drivers under the age of 25 are often considered higher-risk due to their lack of driving experience, resulting in higher premiums. Gender is another factor, with men generally being viewed as higher-risk drivers and paying more for insurance than women. Marital status can also play a role, as insurance companies perceive married individuals as more responsible and less likely to file claims. Additionally, occupation can influence rates, with drivers in professional occupations sometimes receiving lower quotes than those in less-skilled jobs.

Credit History

Insurance companies may also consider an individual's credit history when determining insurance rates. A high credit score can lead to lower insurance rates, while a poor credit score may result in higher premiums. This is based on the belief that there is a correlation between a person's credit score and their driving habits.

Custom paint jobs may increase premiums

While the colour of a car does not typically affect insurance premiums, a custom paint job might. A custom paint job increases the fair market value of a car and the cost to repair it, which in turn increases the insurance policy's comprehensive and collision premiums. This is not because the paint job makes the car more likely to be in an accident, but because the custom job has changed the car's value.

Insurers need to be informed of any vehicle customisations, including custom paint jobs, to ensure the correct coverage is in place. This is known as custom parts and equipment coverage. Without this, the insurer will only pay for the original colour and/or parts as manufactured.

Custom paint jobs can cost anywhere from a few hundred dollars to upwards of $20,000. The cost depends on the extent of the customisation, the quality of the paint, and where the job is done.

Before painting a financed car, it is important to check with the lender to see if there are any restrictions on modifying the vehicle. Some lenders may require approval before making any changes. It is also important to consider the impact on the car's resale value. While a new paint job can increase the resale value, custom paint jobs can also decrease it. Potential buyers may not be interested in a car with a non-factory paint job and may be concerned about the quality of the work.

In summary, while a custom paint job may increase insurance premiums, it is important to note that the increase is not due to an increased risk of accidents but rather the change in the car's value. Lenders and potential buyers should also be informed of any custom paint jobs.

Colour doesn't affect insurance rates

It is a common misconception that red vehicles are more expensive to insure. This myth likely stems from the fact that sports cars, which are often red, are more costly to insure because they tend to be driven at higher speeds, leading to a greater chance of accidents. However, colour has no impact on insurance rates.

Insurance companies are concerned with the risk a driver poses when determining insurance rates. Factors such as the vehicle's age, location, usage, driving record, repair costs, overall safety record, risk of theft, and deductible amounts are considered. The make, model, year, and trim level of the car affect insurance rates, but not the colour. Kristofer Kirchen, president of Advanced Insurance Managers, confirms that "the colour of your vehicle is not even a question on the insurance application, and it is a non-factor."

While colour does not directly impact insurance rates, it can play a small indirect role. If a vehicle's colour is less likely to be targeted for theft, insurance rates may be lower. Additionally, if the paint used is expensive, the vehicle's value increases, leading to higher rates. Custom paint jobs can also result in a small additional fee, as they may be considered custom parts or equipment.

Although red cars are not more expensive to insure, they do attract attention on the road and from the police. As a result, drivers of red cars may be more likely to receive tickets for speeding or other violations, which can increase insurance rates due to a poor driving record.

In conclusion, while the colour red itself does not affect insurance rates, the choices and behaviours of those who are drawn to red vehicles may indirectly influence their insurance costs.

Other factors that influence insurance rates

While the colour red does not impact insurance rates, several factors can influence the cost of car insurance. These factors are used by insurance companies to assess the risk of a driver filing a claim, with lower-risk clients often rewarded with lower premiums. Here are some of the key factors that can affect insurance rates:

Age and Driving Experience

Age is a significant factor in determining insurance rates, especially for young and new drivers. Teen drivers are considered high-risk clients due to their lack of driving experience and tend to pay the highest insurance premiums. Insurance rates generally decrease as drivers age, with the lowest rates offered to drivers in their mid-50s. After the age of 65, insurance rates may increase again as older drivers are more likely to be involved in and injured in accidents.

Driving Record

A driver's history of moving traffic violations, accidents, and convictions (such as DUI) is a critical factor in calculating insurance rates. A clean driving record can result in substantial savings, while multiple infractions can lead to higher premiums and even difficulty in finding insurance coverage.

Credit History

In most states, credit history is another factor used by insurance companies to assess risk. Data suggests that drivers with poor credit scores tend to file more claims and more expensive claims. As a result, drivers with lower credit scores often face higher insurance premiums.

Vehicle Type

The type of vehicle being insured also impacts insurance rates. Insurance companies prefer safer vehicles with high safety ratings as they are less likely to result in expensive claims. In contrast, vehicles that are statistically more likely to be stolen or have higher repair costs will generally be more expensive to insure.

Location

Where a driver lives and parks their car can affect insurance rates. Urban areas, with higher population densities, tend to have higher rates of theft, vandalism, and accidents, resulting in increased insurance premiums. Insurance rates can vary significantly from state to state, depending on state regulations and coverage requirements.

Annual Mileage

The number of miles driven annually can also influence insurance rates. Drivers who commute long distances or accumulate high mileage are more likely to be involved in accidents, leading to higher insurance costs. Conversely, leisure drivers who drive fewer miles may benefit from lower premiums.

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