More Common Auto Insurance Myths
The auto insurance industry isn’t always easy to understand, and it doesn’t help that there are just so many different options when it comes to coverage. Knowing what’s true about auto insurance can be difficult, and in many cases the most potentially knowledgeable source of information (your insurance agent) also has a vested interest in which information you have access to.
Fortunately, you can get past some of the myths about auto insurance and know how things really work with just a little bit of investigating.
Here are some of the most common myths surrounding auto insurance today:
- Red cars cost more to insure. There are some companies out there that will consider a car’s paint job when calculating your premiums, but this is not especially common by any means. Just about every other factor is more important than this one. That doesn’t mean you’re not a more likely target for the cops, however.
- Brand new cars cost more to insure than older cars. Sure, on average, the same make and model of vehicle will be more expensive if it’s new. However, as you get into older cars like classic cars or collector’s vehicles, you’re actually looking at significantly higher auto insurance premium rates. The real question isn’t the car’s age, but it’s replacement cost.
- A car is worth what you paid for it. From the moment you drive a car off the lot, you owe more on it than what it’s worth (unless you put down a sizable down payment. That’s one of the reasons that GAP insurance is such a good idea. If you don’t want to wind up owing on a car loan after the car is totaled by the insurance company, you need to make sure you’re either putting down a big down payment or paying for GAP.
- Your car’s details and your driving history are the only factors that matter. This is patently false. Your age, your gender, and in some states even your credit score may all be a part of what your insurance company is going to take into account when they’re calculating your auto insurance premium rates.
