A mechanic making modifications to a car.

Car modifications

Did you know that changing the look and performance of your car could have a big impact on the price you pay for car insurance?

How car modifications impact insurance

Want to improve the performance of your car? Maybe give it a new look with tinted windows or alloy wheels? Well, whatever kind of car modification you're planning, just remember that it could have a big impact on the price you pay for insurance.

In this guide to car modifications, we'll look at popular car modifications, which ones might affect how much you pay, and which ones you'll need to tell your insurer about.

What's classed as a car modification?

The definition of a modification varies from insurer to insurer. But generally speaking, it's any change that differs from the manufacturer's original factory specification.

There are two types of modifications – performance and cosmetic.

Performance modifications include things like suspension changes, fuel upgrades, increasing horsepower, chip tuning and remaps.

Cosmetic modifications can be small, like stickers or decals. Or they could be major changes, like tinted windows, upgraded speaker systems or specialist paintwork. You might even decide to change the whole look of your car with a body kit. Any of these changes could make your car more desirable or more expensive to repair, and that's why they to be reflected in your insurance premiums.

What modifications affect car insurance?

So, here's something that's really important – if you fail to declare a modification to your car, it can invalidate your insurance cover. This is because modifications can add value to your car, meaning it's at a higher risk of theft. Plus, with all the expensive add-ons, the price of repairing your car after an accident could be significantly higher than your insurer originally said.

If you make alterations to your car and don't declare them, your insurance provider can cancel your policy. This could also make it more difficult or expensive to get cover in the future.

And if you're involved in an accident and didn't declare your modifications, your insurer could also decline any claims you try to make.

Here are some of the most popular car modifications, and all of them need to be declared to your insurer:

  • Engine. Some motorists take great pride in tuning their car's engine – but it will almost always lead to a rise in premiums as you're improving the performance of the vehicle.
  • Wheels. Fitting a set of alloys can make your car more of a target for thieves. The higher the risk of theft, the higher the insurance premiums.
  • Sat nav. Even installing a sat-nav requires you to alert your insurer, as they might regard that the cost of the device will need to be reflected in your policy.
  • Tinted windows. You need to be careful when tinting your car’s windows, not only from an insurance perspective but ensuring you stay on the right side of the law.
  • ECU. Tweaking the ECU (Engine Control Unit or onboard computer) to boost acceleration may also increase how much you pay for insurance.

Will modifications add value or devalue your vehicle?

Most drivers are hoping that modifications will add value to their car – but it doesn't always work out like that.

Carwow polled motorists to find out the modifications that could increase or decrease a car’s value.

The modifications that could increase a car's value:

  • Air conditioning
  • Parking sensors
  • Reversing or parking camera
  • Integrated sat-nav
  • Heated seats

The modifications that could decrease a car's value:

  • Wheels with extreme negative camber
  • Extreme lowering
  • Modified exhaust
  • Eyelashes on headlights
  • Novelty decals, for example flames

Whether you've managed to increase or decrease your car's value with a modification, you should still inform your insurer of any changes.

What modifications can reduce your insurance premiums?

In most cases, a modification will mean a rise in your insurance premiums – particularly if you've managed to increase the value of your car or made it more expensive to repair.

But it works both ways – you can also lower your risk in the eyes of insurers. Changes that boost your car's security and safety could help to lower your premiums.

Here are a just three modifications that could bring down the cost of your car insurance:

Security features. Industry-approved alarms, immobilisers and tracking devices are found to be effective at deterring thieves – insurers can reflect this with a discount on cover.

Parking sensors. Parking sensors help to stop you from hitting another car or object, reducing your risk of an accident.

Tow bar. If you've fitted a tow bar to your vehicle, there's an assumption that you've done so to pull a caravan, trailer or horsebox. With one of these in tow, you're more likely to drive cautiously and carefully, reducing your risk on the road.

Do you have to declare modifications on car insurance?

Every alteration you make to your car should be declared to your insurer. That's not to say that your insurance company will always have to adjust your premiums – it depends on the modification itself – but it's better to be safe than sorry.

If you're still keen on modifying your car, but you don't want to pay more for insurance there are other options you could consider. For instance, telematics insurance could help you to reduce the cost of motoring.

If you want to understand more about how car insurance is calculated, check out this useful guide.

Car insurance

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