Top 5 Auto Insurance Myths

Beware the myths that (1) new cars have higher auto insurance rates, (2) color plays a role, (3) new cars get stolen more, and (4) credit scores don't matter.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Written by Rachel Bodine
Feature Writer Rachel Bodine

Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

UPDATED: Apr 29, 2022

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Things to Remember...

  • There is a misconception that new cars cost the most to put auto insurance coverage on
  • While it may seem that way, the color of your vehicle does not make a difference with your auto insurance rate
  • Your credit score, unfortunately, does affect your insurance rate
  • Make sure your shop around to find the best rate for you with the coverage you need

Buying auto insurance is confusing enough without having to deal with all the crazy myths surrounding it.

How does one cut through all these tales of witches and trolls to know what is real and what is fake? The article that follows will help you differentiate fact and fiction.

Enter your zip code to compare online auto insurance quotes today! By dismissing some of these myths you can find cheaper auto insurance rates and more appropriate policies for your personal needs.

The 5 most common auto insurance myths are as easy as:

1. New Cars Cost More

There is a misconception that new cars cost the most to put auto insurance coverage on. This may be true if one is trying to insure a new Ferrari over that winter beater from the 1980s.

There is one flaw in this myth though. Older cars can topple auto insurance rates. Let’s say you buy a new sedan. That sedan is produced and millions of these sedans roam the roads.

The rate on this car will be relatively cheap thanks to the abundance of them produced. Now, try to insure that antique car. While this car may be older, it is not so easily replaceable. This adds up to higher auto insurance rates.

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2. Car Color Plays a Big Role in Rates

Ever notice how people always associate bad things with cherry red vehicles? While this color may be eye-catching, it is not high auto insurance rate catching. Just think for a moment when the last time that agent asked for the color of your vehicle.

Many only ask for the year, make, model, mileage, and driving distance. You could have a hot pink car with dolls plastered all over the outside and the auto insurance agent could most likely care less.

If you are a high-risk driver with multiple auto insurance claims, a lead foot, and that cherry red speedster, then you can expect higher rates.

3. New Cars Soar in Theft Rates

Auto theft is a key player in those auto insurance rates. Every year new statistics come out on the top ten most stolen vehicles.

Did you know that most of the top ten vehicles stolen are often not the years latest and greatest?

In fact, the 1994 Honda Accord topped the 2010 most stolen list. Its value is based on the parts and a large number of folks that drive that model.

Some other factors include anti-theft systems getting better on a yearly basis, older cars can be more valuable, and the abundance of older models.

Just because you own a new car does not mean your auto insurance rate will be sky high due to auto thefts.

4. My Car is Worth What I Paid for it

Where this myth came about is a mystery. A vehicle is almost never worth what you paid for it. In some cases, the car may actually be worth more than you paid for it.

You will quickly find this out when you go to put auto insurance on it.

New cars instantly lose value when they leave the car lot.

The same is true for any used car purchased from an auto dealer. Cars are almost never worth the money people put down on them.

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5. Credit Scores Don’t Count

The sad truth is this used to be a myth. Credit scores have recently become used more and more by the auto insurance industry.

New legislation has passed to allow these auto insurance companies to base your auto insurance rates on your credit score. That bankruptcy not only means higher interest rates on loans, but it can also mean sky-high auto insurance rates.

Separating myth from fact is a rough process. When all else fails, go in and talk to the auto insurance agent.

They are the best source for deciphering what is actual fact from something some rumor of ages past turned into a myth of deception. Most large companies now have online options for contacting them.

Start with your zip code and compare auto insurance rates for free!

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Enter your ZIP code below to view companies that have cheap auto insurance rates.

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