There are many myths around car insurance. Do red cars mean higher insurance costs? Can you get cheaper car insurance by putting down a different main driver? Does your credit score come into play when looking for insurance?
Here, we look into the most common car insurance myths and get to busting them, so you can make sure you never pay too much for your insurance.
The colour of your car can affect your insurance
A common car insurance myth is that the colour of your car can have an impact on how much you pay. Many people believe that a red car or a black car will be more expensive to insure. However, the majority of car insurers do not take the colour of your vehicle into account when calculating the insurance.
Instead, they look at details about yourself, such as your age, past driving experiences and current driving behaviour, as well as the age, make, and model of your vehicle.
There are certain vehicle modifications, such as getting a car wrap, that can affect insurance. This is because they can be more expensive to repair. However, the colour itself will not impact the price.
Your credit score doesn’t impact your car insurance
It’s commonly known that to get the best car finance deals, a good credit score will be a huge help. Of course, many finance companies offer car finance for bad credit, but either way, your credit score will be taken into account to calculate your finance costs.
Many people don’t know that your credit score will also be considered when applying for car insurance. This is because it’s thought that those who are better at managing their money – and so, will have a better credit score – will be less likely to make an insurance claim.
Your insurer will also typically check your credit score if you choose to pay your insurance monthly rather than paying the full amount in one go. Again, this is to assess how well you manage your money and how likely you will be able to repay all the monthly payments.
Parking your car in a garage will mean cheaper insurance
Many people believe that if you park your car in a garage, you’ll be guaranteed cheaper car insurance. However, this is not the case. Your car insurance is calculated on a number of factors, including how many claims have been made in your area. If there have been many claims near you for cars that have been in garages, you’ll likely end up paying higher costs.
Of course, many car insurance companies will ask where your car will be parked as this can affect your insurance. It makes sense that a car parked on a driveway may be safer than a car parked on the side of the road. However, this is not guaranteed and will depend on the kind of claims that are made in your location.
You can put the main driver down as someone else for cheaper car insurance
Younger drivers with less experience will often find their car insurance costs are very high. To try to combat this, they might choose to put a parent down as the main.
The thinking here is that because their parent has more driving experience, they will be deemed safer by the insurance company, and the costs will be lower. Similarly, someone who has had to make a claim on their insurance might think that putting down a partner who has their no claims discount will mean they can save money on insurance.
However, putting down someone else as the main driver on your own insurance is illegal. Doing so will mean your insurance is invalid. If you are found out, you could be fined up to £5,000 and even be taken to court. You’ll also find it difficult to find another insurer who will cover you in the future.
Sometimes, you can add a parent or partner as an additional named driver on the insurance policy, with you as the main driver. This can sometimes help to reduce costs as the insurance company will know that the vehicle will sometimes be driven by what they deem as a safer driver.
Putting down a lower annual mileage will result in cheaper insurance
It’s often thought that if you put down a very low estimated annual mileage, you’ll be guaranteed cheaper car insurance. It’s thought that if you’re driving your car less, you’ll be less likely to have an accident or have to make a claim.
While this is logical, it’s not the only thing that insurance companies will consider. Some providers may calculate that individuals who drive less will actually be more likely to drive at busier times and on roads they are unfamiliar with, where the risk of an accident is higher. As such, they may judge that a higher insurance cost is required.
You can drive any car if you have comprehensive cover
At one point, it was a standard of comprehensive insurance to cover the named driver to drive any car. However, this is no longer the case.
Some policies will include this as part of their comprehensive cover, but others won’t. It’s important to check the details of the policy you are buying to ensure it includes exactly what you need.
If your policy does include Driving Other Cars (DOC), it will only cover third party liability and not damage to the car you will be borrowing. You’ll also always need to get permission from the owner of the car before your drive it.
Your car insurance costs will go down every year if you don’t claim
Many people believe that every year that they don’t claim on their insurance, their costs will go down. However, this isn’t necessarily true.
For young drivers, they may consistently see their policy costs go down as they gain more driving experience and are seen as less risk by insurers. However, this will reach a limit and then the policy costs will stop getting cheaper each year.
Most insurers will have a maximum no claims discount, which can be around nine years. Once you hit this, any extra years with no claims won’t make your insurance costs any cheaper than that initial threshold.
In addition, insurers will take other things into account when calculating your costs, such as your age. When you reach a certain age, you might be seen as a higher risk when driving, so you might find your costs start increasing again. Your address, the car your drive, and even factors like the general economy will all affect your insurance and could result in higher costs, even if you have never made a claim.
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