Note: This post is directed towards UK readers, but the basic information applies to all countries.
So you’re thinking about modifying your car. Maybe you’re looking to increase the power of your engine, or add that spoiler you’ve always dreamed of.
Maybe you just want a new paint job, but before you make any changes to your car, you should know that the majority of vehicle modifications can significantly increase the cost of your car insurance, sometimes by hundreds of pounds.
What Counts as a Modification?
In the eyes of your insurance provider, a vehicle modification means any change you make to your car to improve either it’s performance, it’s looks or it’s functionality so that it differs from the manufacturer’s original specification. Some of the most popular types of vehicle modification in the UK include adding alloy wheels, improving suspension or changing the exhaust system.
Other examples of modifications include enhancing the engine, adding bodywork such as a bumper or a spoiler, or fitting high-performance brakes.
Modifications that purely add to the aesthetics of your car could also result in an increase in your premium. This includes giving your car a new paint job, or even just adding a ‘racing stripe’. Interior modifications also count, such as replacing your seats, steering wheel or even sound system with upgraded alternatives. Even adding a sat-nav is seen as a modification by your insurers.
Why Do Modifications Add to the Cost of Your Insurance?
The price of your premium – the amount you pay for your car insurance – depends on risk. This risk is calculated by your car insurance provider, who will take into account a number of factors including your personal details and circumstances, your driving record and the type of car you are driving.
Any modification that improves the performance of your car will likely add to your premium as the faster and more powerful your car, the higher risk there is of an accident. This is especially true for engine modifications or adding spoilers. Adding sports seats or racing stripes could also increase your insurance costs. This is because insurance companies believe people who modify their cars in such ways are more likely to drive at higher speeds, and therefore have accidents.
You may think that adding a sat-nav or phone kit to your car won’t affect your insurance, as it’s not affecting the performance of your vehicle. However, such additions do often increase your premium, as it increases the risk of your vehicle being stolen. This is also true if you get a fancy new paint job. It is believed that the most popular targets for thieves are red or blue cars.
How Much Will a Modification Affect Your Insurance?
The extra amount you will be charged on your car insurance after adding modifications depends specifically on which modifications you have.
The costliest modification to make to your car would be to fit in a turbo engine. These could significantly improve the performance of your car, but at the same time will drastically increase your premium by up to 132%. This turns an average premium price of £494 a year to a whopping £1,146.
Modifying your wheels could also result in a dramatic increase in your premium. As upgrades increase the value of the car, they also increase the value of your insurance. Adding alloy wheels and sports tyres could see your premium increase by up to 100%.
Cosmetic modifications can also end up with you paying more for your car insurance. Adding racing stripes or badges could result in an increase of up to 22% on your premium, while changing the paintwork completely could land you with a 36% rise on your bill.
You should always inform your insurer of any modification you make, ideally before you get it done so that you are fully aware of the impact it will have on your insurance. You should also inform them of any modifications that were on your car previously, even if not done by yourself. If you fail to declare your modifications, including the addition of a sat-nav, any claim you make would be invalid and your insurance could be cancelled altogether.
Can Any Modifications Lower Your Insurance?
While most vehicle modifications will no doubt add to to the cost of your car insurance, there are a few modifications you could do which could potentially save you money on your premium. These include any modifications that actually reduce the performance of your car, or increase it’s security.
Adding a tow bar to you car could see your premium fall by up to 20%, while adding parking sensors could save you up to 13% on your cover. So, if you want cheap car insurance, think carefully about how your modifications will affect your premium.