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How car modifications affect insurance

Modifications are changes made to cars after production. Typically, ‘mods’ are installed to boost the performance of the car, to make it look cool, or to make it safer. Yet, they can also affect car insurance premiums. Here’s why.

Car part ; Close up detail of a custom racing carbon fiber spoiler on the rear of a modern car

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If you think modifications that make the car perform better and be potentially safer wouldn’t result in higher car insurance premiums, you’d be wrong. 

Take boosting engine performance, the car will drive better but if it crashes the cost of a claim could be higher, due to the upgrade. Likewise, a custom paint job will make the car stand out, but it’s also likely to attract thieves and vandals, increasing the chance of a claim. 

What car modifications lead to increased motor insurance costs?

It’s not just modifications that could affect premiums, the car itself is also a factor. 

Research shows modifications can affect insurance on the top ten most-popular UK cars, with the highest being a rise of 134% on average for a Volkswagen Golf.

Riverdale Leasing, which undertook a study in 2019, found modifications increased the price of cover by 81% on average, with engine, bodywork or wheel upgrades the most-costly mods, followed by work done on the interior and paintwork. 

Spoilers, lights, air-con, suspension and brake changes will also seriously hike the cost of cover. Even adding external stickers could put you in line for a hike in premiums.

With this in mind, it makes sense to look at the different types of modifications available, how they could affect insurance premiums, and other potential problems. 

Tinted windows

  • Giving your car its own sunglasses may look cool but you’d be in hot water if the glass is too dark. Insurers are likely to take a dim view of tinted windows, because they make it harder to see through the glass

  • The windscreen must be able to let through at least 75% light, while the front side windows must let in 75% light, otherwise you would be breaking the law

  • Motorists who fail to comply with these rules face a fine or a court summons

Alloy wheels

  • This popular cosmetic enhancement can greatly improve the look of your car however, turbine, five-spoke or any other alloy wheels, typically costing more than £100 a set, are also attractive to thieves, which has a knock-on effect on premiums 

Custom paint jobs

  • Having a custom paintjob is one high-profile way to make your car stand out from the crowd, but at more than £3,000 a shot, according to thepaintshopprose.co.uk, they can be pricey

  • Unfortunately, an electric blue Golf GTI could also attract attention from thieves and vandals, which insurers will consider when setting premiums

Spoiler alert

  • If you are keen to give your car a more-sporty look, fixing a spoiler might be the ideal solution - as well a potentially improving performance on the motorway. But to ensure your car insurance is not invalidated, boot, window or roof spoilers must be installed securely to the bodywork and not have any sharp edges

  • Insurers may increase premiums because younger drivers tend to opt for spoilers are may be more inclined to drive faster than they should 

  • Badly installed, spoilers also increase drag - meaning that rather than making it sportier, your spoiler will just reduce your car’s fuel efficiency and potentially even acceleration 

Modified car lights 

  • To be legal cars on UK roads must have white or yellow lights at the front, and red at the rear

  • However, it is possible to upgrade your lights by changing the traditional bulb with LEDs, and fitting neon lights under the car, although the neon strip or bulb must not be visible, and it must have a standalone on-off switch

  • Other big no-nos include spinning or flashing lights on the car, as well as blue or green lights

Lowered car suspension

  • Anyone seeking a sleeker profile might want to consider shaving a few inches off the height of their car by having the suspension lowered 

  • This modification is not without its problems though and should be done by an experienced mechanic who will ensure it will not fail the MOT on this modification

  • Lowered suspension can cause problems for insurance, as the car will handle differently, and damage caused by potholes, speed bumps and curbs is likely to be greater than it otherwise would be 

Enhanced car sound systems

  • Turning your car into one great big sound system can prove a massive draw, but rattling the neighbours and their windows could also land you in trouble with the police, and result in a fine, the vehicle being seized or the equipment confiscated

  • Also, this modification involves a lot of expensive audio equipment installed, which makes the car attractive to thieves, and unlike many performance mods it’s pretty obvious when a ‘subwoofer’ has been installed

Big bore exhausts

  • The sound issue also arises when it comes to exhausts. Buying large or big bore exhausts is not illegal: they may even pass an MOT test because only exhaust emissions are checked 

  • The problem for fans of large exhausts is that law states: 

‘Every exhaust system and silencer shall be maintained in good and efficient working order and shall not be altered so as to increase the noise made by the escape of exhaust gases.’

  • This gives the police the power to stop noisy vehicles, and drivers could face fines and court costs 

Engine modifications

  • A car manufacturer will fit reliable parts and technology into their cars, but not necessarily the very highest quality options. Discerning motorists can pay a garage to re-map the engine and boost performance using an Engine Control Unit (ECU)

  • Using the ECU, an engineer can fine tune everything from wheel speed and braking power, to ignition times, fuel to air ratios and idle speeds, improving the engine’s running and fuel efficiency. Costs start at about £150, but can be far higher 

  • Given the purpose of engine modifications is to increase performance, it will come as no surprise that insurers may raise premiums as more powerful cars are at greater risk of a potentially more costly crash 

Car Decals and bumper stickers

  • Adding decorative modifications or ‘decals’, such as go-faster stripes or vinyl wraps are popular additions, but the jury’s out as to whether they are problematic. Some insurers have no issue with them, others disagree

  • For this reason, it is best to let your insurer know if you have any significant car decal. Incidentally, a ‘my other car is a Ferrari’ sticker is probably not going to be deemed significant 

  • If you are advertising a business on the side of your family car, it’s best to let your insurer know as this could be considered a commercial use   

Can modifications reduce car insurance premiums?

Modifications that make your car less of an insurance risk won’t cause premiums to rise, but you should still report them to your insurer as you may get a premium reduction. Typically, these will be safety and security installations - such as a tracker, immobiliser or parking sensors. 

Brake system upgrades could also see your insurance premium fall, as you benefit from greater control should you need to reduce speed suddenly. The only downside is the cost, which can be several hundred pounds. 

Other modifications may also help keep premiums down. Tow bars can result in lower premiums because when in use the car is often driven at slower speeds. 

Are snow tyres a modification?

You would think snow tyres would be one modification that insurers would welcome and reward, or at least not punish, drivers who install them when the weather turns. Indeed, the Association of British Insurers believes they are not a modification because:

“Motor insurers recognise that, whilst no substitute for common sense driving, winter tyres can have a positive impact on improving road safety.”

While most insurers agree with the ABI, some do not and will increase premiums. To help drivers, the ABI publishes a rollcall of insurers that do and don’t raise premiums if winter tyres are fitted. 

What about car manufacturer-fitted optional extras?

Life would be simpler if the whole automotive industry agreed and stuck to the same definition of modifications, but this isn’t the case. Some insurers class optional extras, added by the manufacturer as modifications. This can include sun roofs and alloy wheels. 

What if I have trouble getting car insurance?

Like it or not, if you want to drive a modified car, you’ll need cover. 

For this reason, it’s best to get a quote before paying for a modified car or for a mechanic to install a modification. 

Are any car modifications illegal?

Most of the more popular modifications are fine to have, providing they meet the manufacturer’s specifications and don’t contravene the law.  

In other cases, the rules are less clear and the first you may learn about any legal problem is when you’re pulled over by the police. Typical problem modifications include tinted windows, loud exhausts, music systems and blue lights. 

While these are all likely to be quickly picked up by the police, other modifications are less easy to spot. Although, if you are found out, or need to make a claim, you could be in trouble with the law or your insurer. Serious modifications to avoid at all times include: 

Catalytic converter modification

  • Catalytic converters are installed to help lower emissions of toxic gasses and particles. Removal to improve airflow or simply to avoid replacing a damaged or stolen part is therefore illegal

Nitrous Oxide engine boosters

  • It is possible to enhance the acceleration performance of a car by having a modification installed that injects this highly dangerous compound into the fuel line. Due to its extreme flammability, mixing N2O with fuel is illegal

What if my car has an illegal modification?

If you buy a car from a dealer, and find it has an illegal modification, take it back. The dealership can’t complain, even if they told you about the modification beforehand, as they have a responsibility to sell cars that comply with the law.

In case of a private purchase, again approach the seller and ask for your money back or for them to remove it. 

If you unknowingly install an illegal modification, get it removed or altered to make it legal. Otherwise, you can’t drive your car, hold valid insurance and may potentially face police action. You can’t sell a car with illegal modifications if it is to be used on the road.

Can modifications damage your car?

Modifications are supposed to make your car look, feel or drive better or more safely. Some will cause your insurance premiums to go down, many will lead to higher payments. But there is another issue to bear in mind: modifying your car could actually damage it.

Christofer Lloyd, motoring expert at Buyacar.co.uk said:

“Manufacturers spend billions developing and fine-tuning their cars, and this can all be knocked out of kilter by adding a modification. For example, replace a set of 17-inch tyres with 22-inch ones could damage the wheel arches, cost you more in fuel as well as impact your insurance.”

This is just another reason to think twice before buying a modified car, or adding modifications to your own vehicle, particularly extreme ones, such as detachable steering wheels and massively-oversized wheels – which are likely to fall foul of the law.

Can cars bought on finance be modified? 

Nine in ten new cars are bought on finance, of which Personal Contract Purchase (PCP) is the most popular. If you modify a car obtained under PCP or hire purchase you could face difficulties should the finance company find out, even if the changes increase the car’s value. 

This is because the car remains the property of the finance company for the duration of the contract term (and after in the case of PCP), and modifications will affect the cost of insuring the car going forward.

Should the company become aware of any unauthorised upgrades it could terminate the contract, retrieve the car and make the driver pay for any financial hit suffered removing the modifications or selling the car.

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