Close up of man's hands holding pen and insurance forms

1. Insurers base your rate on the colour of your car

One of the most persistent myths about car insurance is that red vehicles cost more to insure. That’s just not true.

In fact, none of the information you give your insurer — such as your car’s make, model, year and vehicle identification number (VIN) — tells them what colour your car is.

Car insurance premiums in Canada are influenced by other factors, though, including make, model, price, engine size and the vehicle's overall safety record. The cost to repair the car after an accident will also impact your rate.

And, of course, insurers care a lot about your driving record, how much you use your car, and where you park it.

2. My credit score doesn’t impact my insurance rate

Man Holding Smartphone Showing Credit Score Rating on Screen
Andrey_Popov / Shutterstock

Most insurers use a credit-based insurance score to calculate your premiums, so your credit score can play a role in how much you’ll pay. So if you have poor credit, your premiums will probably reflect that.

3. Older drivers cost more to insure

It’s actually the opposite. Because drivers over the age of 55 tend to drive less and are generally safe drivers, many insurance companies will offer them discounted rates on auto insurance. They also tend to drive vehicles with better safety records such as sedans, minivans and SUVs.

And, once you retire and are presumably using your car less, your insurer may also grant you a discount. If you’re a safe driver approaching your golden years, talk to your insurer about how they can help you stretch out your retirement income with a lower rate.

4. Accidents and tickets affect my rate forever

You may be relieved to hear that tickets only stay on your driving record for three years and accidents for six years. If you keep a clean record for the rest of that period, you should be back to more affordable premiums in no time.

And if you have accident forgiveness on your policy, your first at-fault accident will be forgiven provided there are no injuries. This means it won’t affect your rate in the short term.

5. All car insurance companies have similar rates

Concerned looking couple sit on couch, looking at tablet and pieces of paper
Antonio Guillem / Shutterstock

If that’s what you think, chances are you’re overpaying.

Experts recommend you review at least three different quotes before selecting an insurance policy. You’ll find there’s actually a whole range of different policies at varying price points.

The best way to save on car insurance is to shop around before you settle on the right policy for your needs and budget. A site like will do all the price comparisons for you and simply present you with the highest-quality auto insurance at the best rate — and that’s definitely not a myth.

About the Author

Sigrid Forberg

Sigrid Forberg


Sigrid is a reporter with MoneyWise. Before joining the team, she worked for a B2B publication in the hardware and home improvement industry and ran an internal employee magazine for the federal government. As a graduate of the Carleton University Journalism program, she takes pride in telling informative, engaging and compelling stories.

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