There are many misconceptions about car insurance that can impact your finances. With the complexity of this product, it’s important to separate fact from fiction to make wise decisions when purchasing coverage or switching providers.

Below are eight common car insurance myths explained:

Myth 1: Older cars always cost less to insure.

The truth: It depends. While the age of your vehicle can affect rates, your insurer considers other factors such as the likelihood of theft and parts availability. Therefore, even an older car can incur a higher premium.

Myth 2: Red cars cost more to insure.

The truth: The color of your car has no bearing on your insurance rate. The make, model, and mileage of your vehicle are the critical factors.

Myth 3: Your credit rating won’t impact your insurance rates.

The truth: Insurers use a credit-based insurance score that reflects your financial responsibility. A low score may increase your premiums, so maintaining good credit is essential.

Myth 4: Seniors always pay higher premiums.

The truth: Age is a relevant factor for calculating premiums, but many insurance companies offer discounts to senior drivers who complete defensive driving courses or are members of certain motorist clubs.

Myth 5: A rental car is always provided after an accident.

The truth: While some insurers offer rental cars as an extra benefit, you may need to purchase additional coverage for a rental. If you are at fault in an accident, coverage may not apply.

Myth 6: Insurance will pay off your auto loan if your vehicle is totaled.

The truth: Your insurer reimburses you for the current value of your car and not the amount owed on your auto loan. You can avoid this issue by purchasing additional coverage for depreciation.

Myth 7: Male drivers pay higher premiums than female drivers.

The truth: Insurers set rates based on driving records and profile, not gender. Any driver with a history of accidents or traffic violations may pay more.

Myth 8: Your insurance agent will find you the best deal.

The truth: Agents represent a single company and only offer coverage from that provider. You can save money by shopping around and comparing prices for similar coverage.

It’s crucial to choose car insurance that provides enough coverage to protect your family and your finances. Understanding these common myths will help you make informed decisions and avoid unnecessary expenses.