Guides & Tips Community Compare Car Companies Car Insurance Companies More Car Insurance Options Why Us?

Car Insurance Myths

Feb 17, 2011

When it comes to car insurance you may be under the impression that some things that you have heard are true.  People tend to believe what they hear especially if the truth is less appealing.  This article aims to put you straight where a number of these myths are concerned.

Myth No:1 – My insurance premium will not be affected by my credit rating.
Obviously the state of your credit rating cannot affect how much you pay for your insurance premiums – can it?  Well the truth is that while your risk of crashing your car is not any higher if you have a bad credit rating, your ability to make monthly payments could be affected.  An insurance company will take a look at your credit rating and will consider you to be a high risk in terms of finances and this could affect how much you pay or whether or not you will be accepted.

Myth No:2 – The colour of a car does not affect your car insurance premiums
Although most car insurance companies will strongly refute these claims and will not use this when calculating the premiums, there are some insurance companies that will take the colour of your car into consideration when carrying out a risk assessment.  This is because studies have shown that a white car is more likely to be targeted by thieves due to the fact that it is much easier to re-spray a white car.  Another thing that car insurance companies will take into consideration is the fact that darker coloured cars are more likely to be involved in accidents during the hours of dusk and dawn.

Myth No:3 – If my car is a write off then my car loan will be paid off.
This is something that a lot of people get confused about.  However if your car is a write off, the insurance company will only pay the current value of your car having taken mileage, age and condition of the car into account.  If you currently owe more money than your car is worth then you could end up still owing on your loan.  This is particularly true of newer cars because you may have taken out a loan to pay the full price of a brand new car but if you write it off within a few months, you will find that the value of your car had dropped by quite a bit due to depreciation.