Red Cars, Old Cars, Electric Cars — What Actually Affects Your Auto Insurance Rate?

You’ve heard it your whole life: red cars cost more to insure. Or that older cars are always cheaper. Or that your electric vehicle will wreck your premium. Here’s the thing — most of what people “know” about auto insurance pricing is wrong. And those myths can cost real money when you’re shopping for coverage.

Let’s clear it up.

The Color of Your Car? Doesn’t Matter.

Insurers don’t ask for your car’s color. Not on the application, not in the underwriting process, not anywhere. The red car myth is completely false. What they do ask for: the make, model, year, trim level, and VIN. That’s what drives pricing — not the paint.

Old Cars: Cheaper Isn’t Always the Full Story

Older vehicles are often cheaper to insure for collision and comprehensive — because the car itself is worth less, so the insurer’s exposure is lower. But “cheaper” depends on what coverage you’re carrying.

Liability coverage — the part that protects you if you injure someone or damage their property — doesn’t change based on your car’s age. In Minnesota, North Dakota, Iowa, South Dakota, and Wisconsin, minimum liability limits are set by state law, and those requirements apply whether you’re driving a 2005 Civic or a 2024 pickup.

The bigger question with older cars: is the vehicle worth carrying full coverage on at all? A rough rule of thumb — if your car’s value is less than 10x your annual comprehensive and collision premium, dropping those coverages might make sense. Just make sure you can absorb the loss if something happens.

Electric Vehicles: Yes, They Cost More to Insure. Here’s Why.

EVs are genuinely more expensive to insure in most cases — and it’s not a myth. The reasons are real:

• Repair costs are higher. Specialized parts, battery systems, and fewer certified repair shops all drive up claim costs.
• Parts availability is inconsistent. Longer repair timelines mean more rental car days, which insurers absorb.
• Battery replacement is expensive. Even a moderate accident can trigger a battery assessment — and those aren’t cheap.

That said, EV drivers also tend to drive fewer miles and file fewer claims on average, which can offset some of that cost. The net effect varies by vehicle and carrier.

What Actually Moves Your Rate

Here’s what insurance companies are actually pricing when they quote your policy:

• Your driving record. Tickets, accidents, and claims history are the biggest rate factors — bar none.
• Your vehicle’s make, model, and trim. A sports package on the same base model can mean a meaningfully different rate based on how those vehicles perform in claims data.
• Where you live and garage the vehicle. Urban zip codes in the Twin Cities or Fargo carry different risk profiles than rural South Dakota or western Iowa — and insurers price accordingly.
• How much you drive. Annual mileage matters, particularly for carriers using usage-based pricing programs.
• Your credit-based insurance score. Minnesota, North Dakota, Iowa, South Dakota, and Wisconsin all permit the use of credit in auto insurance pricing. It’s not your credit score exactly — but it’s correlated.
• Your coverage selections and deductibles. A $500 deductible versus a $1,000 deductible on comprehensive and collision creates a meaningful premium difference.
• Prior insurance history. Lapses in coverage — even short ones — can flag you as higher risk in certain carrier systems.

The Most Overlooked Rate Factor

Your insurer. Seriously. The same driver, same car, same zip code can get dramatically different quotes across carriers — because each company weighs these factors differently based on their own claims experience. That’s exactly why independent agents exist. We shop multiple carriers to find where your specific profile lands most competitively.

Bottom Line

Don’t let insurance myths guide your decisions. The color of your car is irrelevant. The age of your car matters — but only in context. And if you’re driving an EV or shopping for one, build a realistic insurance cost estimate into your budget before you sign.

If you’re in Minnesota, North Dakota, Iowa, South Dakota, or Wisconsin and want an actual apples-to-apples comparison across carriers — that’s exactly what we do.

Get a quote or ask a question — no pressure, no runaround.
Connect with Mitchell Insurance Agency →