I'm thinking about buying a red car. But I heard that the color of your car can affect your car insurance rates. Is this true?

No, this is a common myth that's been around for a long time. Perhaps it stems from the image of flashy red sports cars, designed to go fast and catch the eye. Although a top-of-the-line red sports car may be more expensive to insure than, say, a basic, blue four-door sedan, the premium difference would have nothing to do with the color of the vehicles. Instead, the difference in the car insurance rates would be tied to the claims history of the makes and models.

Car insurance companies are interested in the year, make, model, body type, engine size and age of your vehicle, particularly if you buy collision and comprehensive coverage. Unlike the liability portion of a car insurance policy, which pays other people for damage or injuries you cause in an accident. Unless you lease or finance a vehicle, collision and comprehensive coverage are optional. Collision covers the cost of repairs to your car if you get in an accident and comprehensive covers damage to your car caused by something other than an accident, such as theft, vandalism, natural disaster or collision with an animal.

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Many insurance companies use vehicle ratings by the Insurance Services Office (ISO), a statistical and actuarial reporting group for the insurance industry, to help set premiums. The ISO rates each vehicle based on its claims history. Cars that are more expensive to repair or replace or that are more likely to be stolen are given a higher rating, which translates into a higher premium. You might agonize over which color to choose, but because the car's color has nothing to do with the likelihood of claim costs, your insurance company doesn't care if you pick racy red or boring brown. In fact, your insurance agent or an insurance company providing car insurance quotes probably won't even ask about the color of your car.

For more, see 6 top car insurance myths and how your car drives your insurance premium.