Don’t get slugged with a ‘colour premium’ on your car insurance

New research reveals motorists could be slugged with a ‘colour premium’ or higher car insurance premiums based on the colour of their car.

Think your car looks better in black? If you’re looking to save on your car insurance premiums, maybe check with your other-colour car friends first.

Research by car insurance comparison service Compare the Market (where I am Economic Director) found that darker-coloured cars tend to attract higher insurance premiums than their lighter counterparts. In fact, on average, insurers who do change their pricing based on the colour of the car were seen to increase their premiums by as much as 8.72 per cent for the same make and model of a vehicle, when only the colour of the car changed from white to black.

While it can be surprising to see such large discrepancies between some insurance policies based purely on colour, the fact is that some colours may make a vehicle more susceptible to theft or being in an accident and in turn, increase the risk of you needing to claim with your car insurer.

Darker coloured cars are harder to see

For example, darker coloured cars may be harder to see at night or during storms, which could result in more crashes and potentially drive-up prices. In other instances, novelty colours, such as gold or even purple, may be more challenging to repair if the bodywork is damaged.

These findings are just a great insight into how differently insurers can calculate risk based on historical data, and it’s something to keep in mind when you’re looking at your car insurance renewal.

However, it should be noted that not all insurers have a premium pricing policy based on colour. On average, the research found that the prices of policies with a ‘colour premium’ were still cheaper than the average price of those policies without colour premiums.

Source: Compare the Market

A colour premium doesn’t mean most expensive

At the end of the day, in some cases, going with a brand that does have a colour premium may still come out cheaper than the policy you’re on.

As the team at Compare the Market found in its analysis, most of the insurers who had one single-priced policy, no matter the car’s colour, were often still more expensive than some of the more expensive ‘black car’ policies.

So, there are still plenty of savings to be had, no matter which insurer you choose… or the colour of your car.

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