Top 5 Auto Insurance Myths (2024)
Beware the myths that (1) new cars have higher auto insurance rates, (2) color plays a role, (3) new cars get stolen more, and (4) credit scores don't matter.
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Jimmy McMillan
Licensed Insurance Agent
Jimmy McMillan is an entrepreneur and the founder of HeartLifeInsurance.com, an independent insurance brokerage. His company specializes in insurance for people with heart problems. He knows personally how difficult it is to secure health and life insurance after a heart attack. Jimmy is a licensed insurance agent from coast to coast who has been featured on ValientCEO and the podcast Modern Li...
Licensed Insurance Agent
UPDATED: Oct 13, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Oct 13, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
Buying auto insurance is confusing enough without having to deal with all the crazy myths surrounding it.
How does one cut through all these tales of witches and trolls to know what is real and what is fake? The article that follows will help you differentiate fact and fiction.
Enter your zip code to compare online auto insurance quotes today! By dismissing some of these myths you can find cheaper auto insurance rates and more appropriate policies for your personal needs.
The 5 most common auto insurance myths are as easy as:
- There is a misconception that new cars cost the most to put auto insurance coverage on
- While it may seem that way, the color of your vehicle does not make a difference with your auto insurance rate
- Your credit score, unfortunately, does affect your insurance rate
- Make sure your shop around to find the best rate for you with the coverage you need
1. New Cars Cost More
There is a misconception that new cars cost the most to put auto insurance coverage on. This may be true if one is trying to insure a new Ferrari over that winter beater from the 1980s.
There is one flaw in this myth though. Older cars can topple auto insurance rates. Let’s say you buy a new sedan. That sedan is produced and millions of these sedans roam the roads.
The rate on this car will be relatively cheap thanks to the abundance of them produced. Now, try to insure that antique car. While this car may be older, it is not so easily replaceable. This adds up to higher auto insurance rates.
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2. Car Color Plays a Big Role in Rates
Ever notice how people always associate bad things with cherry red vehicles? While this color may be eye-catching, it is not high auto insurance rate catching. Just think for a moment when the last time that agent asked for the color of your vehicle.
Many only ask for the year, make, model, mileage, and driving distance. You could have a hot pink car with dolls plastered all over the outside and the auto insurance agent could most likely care less.
If you are a high-risk driver with multiple auto insurance claims, a lead foot, and that cherry red speedster, then you can expect higher rates.
3. New Cars Soar in Theft Rates
Auto theft is a key player in those auto insurance rates. Every year new statistics come out on the top ten most stolen vehicles.
Did you know that most of the top ten vehicles stolen are often not the years latest and greatest?
In fact, the 1994 Honda Accord topped the 2010 most stolen list. Its value is based on the parts and a large number of folks that drive that model.
Some other factors include anti-theft systems getting better on a yearly basis, older cars can be more valuable, and the abundance of older models.
Just because you own a new car does not mean your auto insurance rate will be sky high due to auto thefts.
4. My Car is Worth What I Paid for it
Where this myth came about is a mystery. A vehicle is almost never worth what you paid for it. In some cases, the car may actually be worth more than you paid for it.
You will quickly find this out when you go to put auto insurance on it.
New cars instantly lose value when they leave the car lot.
The same is true for any used car purchased from an auto dealer. Cars are almost never worth the money people put down on them.
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5. Credit Scores Don’t Count
The sad truth is this used to be a myth. Credit scores have recently become used more and more by the auto insurance industry.
New legislation has passed to allow these auto insurance companies to base your auto insurance rates on your credit score. That bankruptcy not only means higher interest rates on loans, but it can also mean sky-high auto insurance rates.
Separating myth from fact is a rough process. When all else fails, go in and talk to the auto insurance agent.
They are the best source for deciphering what is actual fact from something some rumor of ages past turned into a myth of deception. Most large companies now have online options for contacting them.
Start with your zip code and compare auto insurance rates for free!
Frequently Asked Questions
Red cars are more expensive to insure. Is this true?
No, the color of your car has no impact on your auto insurance rates. Insurers primarily consider factors such as your driving history, the make and model of your car, your location, and other personal details when determining your premiums.
My auto insurance covers me if I use my car for business purposes. Is this correct?
Generally, personal auto insurance policies do not cover vehicles used for business purposes. If you use your car for business, it’s advisable to obtain commercial auto insurance to ensure you have proper coverage in case of an accident or other incidents related to your business activities.
Auto insurance covers me if my car is stolen or vandalized. Is this true?
Comprehensive insurance coverage typically protects against theft and vandalism. However, it’s important to review your policy to confirm the specific coverage details and any deductibles that may apply. Liability insurance, which is required in most places, generally does not cover theft or vandalism.
If a friend borrows my car and gets into an accident, their insurance will cover it.
In most cases, car insurance follows the car, not the driver. If someone borrows your car with your permission and gets into an accident, your auto insurance policy would likely be the primary coverage for the incident. However, it’s always a good idea to check with your insurance provider to understand the specific terms and conditions.
If my car is totaled, my insurance will cover the full cost of a new car.
This is not entirely accurate. Auto insurance policies typically pay the actual cash value (ACV) of your car at the time of the loss, which considers factors like depreciation. If you want coverage for the full cost of a new car, you may need to consider adding gap insurance or a new car replacement endorsement to your policy.
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
Secured with SHA-256 Encryption
Jimmy McMillan
Licensed Insurance Agent
Jimmy McMillan is an entrepreneur and the founder of HeartLifeInsurance.com, an independent insurance brokerage. His company specializes in insurance for people with heart problems. He knows personally how difficult it is to secure health and life insurance after a heart attack. Jimmy is a licensed insurance agent from coast to coast who has been featured on ValientCEO and the podcast Modern Li...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.