Does car color affect insurance?
Fact-checked with HomeInsurance.com
Does car color affect insurance? Many variables go into calculating an auto insurance premium, but car color isn’t one of them. This doesn’t mean that car color can’t indirectly impact auto insurance, though. There are situations, such as higher demand and lower supply for a specific color, that can increase the cost of a car and thereby increase its premiums.
We asked insurance expert Laura Adams how car color plays into auto insurance premiums and she said, “The color of your vehicle is never a factor in your car insurance rate.” However, she added a caveat: “A red car could indeed cost more to purchase if it’s in high demand, or a dealer must pay extra to special-order it.”
So, is insurance more expensive for red cars? That depends. Below we dive deeper into how car color and auto insurance interact.
Top car colors
Cars can change in price based on several factors, but nothing ranks higher than supply and demand. When looking at car insurance, the market for vehicles can play a significant role. The popularity of a given car color can ultimately influence how expensive that car is and, as a result, how much it costs to insure. Axalta, a coating company, performed a study on the most popular car colors in 2019. Here are their results for North America.
Most popular car colors in North America in 2019
- White 29%
- Black 19%
- Gray 17%
- Silver 11%
- Blue 10%
- Red 9%
- Brown/Beige 2%
- Green 1%
- Yellow/Gold 1%
- Others 1%
Car color and auto insurance
Does the color of your car affect your insurance rate? It can, but not directly. Auto insurance companies will not use the color of your vehicle in their calculations for your insurance premiums. They will, however, factor in the cost of the car and the cost of any repairs to that car model and color. Depending on the vehicle and on the availability, this can have a significant impact.
Custom paint jobs, for instance, will almost certainly increase the value of your car and, therefore, the cost of repairs. This, in turn, will result in the insurance company charging more to cover your vehicle. So, do you need red car insurance? Not likely. As we saw in the Axalta study, red cars aren’t in particularly high demand.
What about other factors? According to Adams, “Red vehicles may attract more attention, even from the police. If you get a ticket for speeding, having a moving violation on your driving record can undoubtedly cause your auto insurance rate to rise.”
So while insurance may be more expensive for red cars in some situations, it isn’t directly due to the car color. Your auto insurance company is just one system that relies on numerous other systems for its data and functionality. When these different systems (like market demand) cause a price increase linked to car color, this value hike can be reflected in auto insurance.
The exception: when color does matter
We’ve discussed some situations where car color can impact auto insurance rates but let’s explore a few more. While most situations will increase your insurance premiums based on the color of your car there is one exception – when your car color is one of the least likely to be targeted for theft it can lower your premium based solely on the color of your car.
For starters, if the paint used for your vehicle is particularly expensive to purchase or apply, then you will see a spike in the car’s value. Any increase in value can lead to a corresponding increase in that vehicle’s auto insurance costs.
Custom parts are another way that color can impact your car’s value and premiums. Some custom paint jobs will require custom parts that have to be specifically designed and produced for that job. This generally comes with a high cost that can end up being partially reflected in the car’s insurance rates.
Factors that do affect your auto insurance rates
So, if car color doesn’t affect auto insurance rates directly, what does? Insurance companies use numerous factors to determine car insurance premiums. Laura Adams reports, “The key factors in how much you pay for an auto policy are your age, years of driving experience, gender, driving history, make and model of vehicle, mileage and credit (in most states).”
Each of these variables can increase or decrease the rates on your auto insurance. While some, like age, are outside of our control, others like vehicle type and driving record are well within our grasp.
- Auto insurance companies do not factor car color into the cost of your premium.
- Car color can affect car value.
- Supply and demand of colors impacts car value.
- Expensive paint jobs and custom parts increase car value.
- Car value is factored into auto insurance premiums.
While car color can end up indirectly affecting auto insurance premiums, it isn’t factored in directly by the insurer. Instead, color only affects rates when it has already changed the vehicle’s value. Custom paint jobs, extra labor, custom equipment and parts can all increase a vehicle’s insurance premium, but rarely by much. In the end, the market value and probability of incidents are going to determine which physical parts of your car the auto insurers are interested in.