You’ve finally fulfilled your lifelong dream of getting a brand new red sports car. Congratulations! Your driveway is now your showroom where you are showered with compliments from the neighbors. “Nice car!” and “Is it fast?” are two things you’ll hear a lot. But you might hear a few people say “a red car, that’ll cost more to insure.” or “a bright car will get you more tickets.” Are these people right? We’ve done a little research to find out and we think they might just be jealous.
Will my bright red car make my insurance premium higher?
A common misconception is that car insurance rates are affected by the color of your car. Just because your car is red, yellow, green, etc. does not mean that it’ll cost you more to insure. One thing that does affect the rate is the type of car. A new bright red midsize sedan with a 5-star safety rating is more likely to cost less than an older black sports car. What insurance companies take into account is the type of year, make, model as well as body style and engine. The VIN (Vehicle Identification Number) is what they use to find this out. The idea that red cars get more tickets is because red is associated with sporty cars. People assume that a sporty car will drive faster and more aggressive than other vehicles on the road, and this creates the idea of “arrest-me-red” cars getting more tickets. So the insurance cost isn’t really a question of the color of the car, it’s what kind of car.
Are there any other factors that affect my premiums besides the type of car I drive?
Yes. Many factors are taken into account, some you can control, some you can’t. If your area has a high theft rate or costly medical bills, insurance companies might just charge the whole town more. Various details from your region are looked at. Over time things may change. This combined with your history of tickets and other things can show if you have become or have been a responsible driver. A 25-year old driver with more points on his license that’s driving an older sedan would probably be paying more than a 35-year old driver with no points and a newer sports car. Crash test ratings of the vehicles are also looked at, as well as anti-theft and security features. The older sedan may not have airbags or not have a good safety rating, whereas the newer sports car may have a 5-star safety rating and a perimeter alarm. In the end, simply driving carefully in a safe car would help lower your rates over time.
Anything I can do to get better rates?
If you’re a student, many companies will offer lower premiums if you work hard for those A’s; they will help you out a lot more than you think. Credit history can also be taken into account. Having good credit shows responsibility, in turn, showing you are a careful driver. For more information about credit, check out this article Zach posted a while back. Some insurance companies offer a device to monitor your driving habits for lower rates. If you have a light foot when accelerating and braking, getting these programs could help you get up to 30% off your premium.
Insurance premiums depend on a lot more than just the color of your car. Different factors such as credit history, vehicles being insured and even the area you live in are all taken into account. Before you choose a company to go with, shop around and find the one that fits your needs. Most importantly make sure you are responsible and take the right steps to be prepared!