5 Common Myths About Car Insurance Costs, Debunked

How many times have you heard someone say, 'Avoid red cars — they’re more expensive to insure’? It’s one of the most common myths that get thrown around, but it’s false. While factors like your car’s make and model impact your auto insurance policy, its color does not.

The red herring about red cars is not the only misconception that can make budgeting for car insurance more confusing than it needs to be. We've addressed five other common myths, so you can make smarter choices and get the coverage you actually need.

Myth #1: Online rates are exactly what you'll pay

Online comparison tools make it easy to shop around, but those quotes are just estimates. They’re typically based on basic information — like your car’s VIN number, year, make and model — and don’t always reflect the full picture.

If you forget to include key information or later decide to add extras like roadside assistance or rental reimbursements, the final price could be higher than the initial quote. When you’re ready to buy a policy, working with a company representative can ensure you get the most accurate rate based on your needs.

Myth #2: Your credit score won't affect your insurance rate

In most states, insurers use credit-based insurance scores and other factors like your driving record and claims history as part of the underwriting process. Why? Because studies have shown that drivers with higher credit scores tend to have fewer accidents.

To insurers, a strong credit score indicates that you’re less likely to file an insurance claim. So, the better your credit, the lower your premium.

Myth #3: Premiums are negotiable

Unfortunately, car insurance premiums aren’t something you can haggle over. The industry is heavily regulated, and insurers use detailed algorithms to calculate premiums based on risk factors like your driving history, vehicle and location.

But while you can’t negotiate your premium, you can take steps to lower it. Shopping around, increasing your deductible and asking about available discounts — like safe driver, low-mileage or good student — can help reduce your costs. And once your policy term ends, shop around and compare rates to see if you can score something lower elsewhere.

Myth #4: New cars are always expensive to insure

It’s true that new cars tend to be more expensive — mainly because they cost more to repair or replace. But you might actually save money depending on the car's safety features, repair costs and the availability of parts.

If you’re buying a new car, you can lower your insurance cost by choosing a model with strong safety ratings and features like automatic braking, anti-theft systems and collision avoidance technology. These features reduce the risk of accidents, injury and theft — all things insurers consider when calculating your premium.

Myth #5: The older you are, the lower your rate

Although it’s true that older drivers tend to pay less than teens and young adults, that’s only to a point. That point, depending on the insurer, can range between 65 and 75. Car insurers base their rates on risk, based on data. That age range is when accident and claims data often reveals that drivers begin to pose a higher risk behind the wheel, and insurers often raise rates accordingly.

That said, other factors play a big role in determining your premium. For older drivers who have spent a long time with a particular insurer, with no claims or infractions, those additional factors might include loyalty rewards that at least offset any increase in rates due to age.