How Will Aftermarket Parts Change My Car Insurance Rates?

If you add aftermarket parts and don’t purchase a policy that covers them, your insurance policy will not be affected, but your changes will not be covered.

Aftermarket parts are any parts that don’t come from the manufacturer. Sometimes they’re used as replacement parts following breakdown or damage, and other times they’re added to enhance performance. You can even use aftermarket parts to customize the appearance of your vehicle. 

Each of those three types of aftermarket parts has a different effect on your car insurance. 

For example, the expected car insurance cost for a Honda CRV is based on how the vehicle is originally manufactured. Changes to the engine or body of that vehicle could change the way insurance values the car. 

We’ll cover what kind of modifications make a difference to how insurance will cover your vehicle and which ones don’t. We’ll also let you know what you need to do to make sure your vehicle’s modifications are covered.

Aftermarket Replacement Parts

If you get in an accident, often the repair shop will use aftermarket parts to repair your vehicle. Usually, those parts are cheaper than manufacturer parts. Sometimes the quality is equal, and sometimes the parts are lower quality.

If it’s important to you to have manufacturer parts, make sure that your car insurer will cover those parts. Not all will. In some states, repair shops don’t even have to indicate whether they used a manufacturer part or an aftermarket part.

Aftermarket parts equivalent to manufacturer parts aren’t just used after damage. Sometimes, your car breaks down, or something on it wears out and needs to be replaced, and you have the choice to use manufacturer parts or aftermarket parts. 

For example, if the alternator dies on your Ram truck, you can replace it with an alternator from the dealer or use a NAPA alternator. It’s up to you to weigh the pros and cons of each choice when you decide how to get your vehicle in working condition again.

Whatever you choose, though, if you used a part that is equivalent to what came on the car originally, it won’t make a difference with your insurer. 

You don’t need a special insurance policy such as custom parts and equipment coverage to cover equivalent parts. If your vehicle is damaged in a crash that your insurer covers, they’ll protect your loss according to your policy terms. 

Aftermarket Performance Parts for Performance Upgrades

You can do whatever you want with your vehicle as long as you don’t make something about your vehicle illegal and as long as you can pass inspection if you live in a state that requires them. 

But if you spend three grand on a cold air intake, exhaust, and tuning and then cause a crash that totals your vehicle, your insurance company is only going to reimburse you for the value of the car without all those extras. 

Even if your car is repairable, your insurance will cover the costs of replacing what came one the vehicle originally, not what you put into it.

A small portion of your upgrades may be covered by insurance, depending on where you live. Many states require insurance companies to cover $500 to $1,000 in upgrades. Beyond that, though, you’re on your own with a standard full-coverage policy.

Thankfully, you have options; you’re not stuck with a standard car insurance policy. Many insurers offer a custom parts and equipment policy.

The following are some of the most popular performance upgrades for different vehicle brands:

• Toyota – Cold air intake
• Honda – Exhaust
• Ford – Exhaust, cold air intake, performance tuner
• Chevrolet – Cold air intake, muffler, exhaust

If you purchase a custom parts and equipment policy for your vehicle, chances are you’ll make more modifications after you buy your policy. Make sure you let your insurer know when you add aftermarket parts that change your vehicle’s value. They may need to change your policy terms to reflect it.

Aftermarket Exterior Modifications

Sometimes you make exterior modifications for looks, sometimes for performance, and sometimes for convenience and practicality.

For example, if you have a truck, you’re probably going to add running boards. If you need modifications because of a disability, you’re going to have to add aftermarket parts to accommodate your needs. 

If you want your car to look like a racer, you might add a spoiler. You may install a new stereo system just because you want better sound quality.

The list of reasons behind making modifications is endless, but one truth is universal. If you have a standard full-coverage insurance policy, your modifications won’t be financially protected.

The following are some of the most popular exterior modifications for different types of vehicles:

• Toyota – Rims and tires
• Honda – Suspension
• Ford – Rims and tires, grill
• Chevrolet – Suspension, window tinting

Insurance companies treat exterior modifications similarly to performance upgrades. In states where they’re required to cover vehicle modifications up to a set limit, they will. That limit is usually either $500 or $1,000, so it may not be sufficient coverage for what you’ve done to customize your car.

Custom Parts and Equipment Coverage

A custom parts and equipment policy will protect your financial investment in aftermarket parts more fully. Many national insurance providers offer this type of policy to build it into your existing car insurance coverage.

If your current insurer doesn’t offer custom parts and equipment coverage, you should make a list of companies that do and then compare insurance rates to help determine which will be the best fit. Since it’s an extra coverage added to a standard full-coverage policy, it will cost more than a standard policy.

Custom parts and equipment coverage usually has a max limit of $5,000, but some companies offer riders up to $10,000. When you compare policies, make sure you understand the coverage limit, and if $5,000 isn’t sufficient, try to find an insurer that offers a higher limit.

The cost of a custom parts and equipment rider will depend on your individual risk factors. Because of the standard $5,000 limit, insurance companies don’t assume excessive risk with this policy, so the monthly premium will reflect that. At most, you may spend $50 per month for the custom parts and equipment rider. 

No matter what your reason for using aftermarket parts on your vehicle, the modification will likely change your car’s value, and they’ll probably have an impact on your insurance coverage. 

By paying a bit more each month on premiums, though, you can rest assured that your aftermarket investment will be financially protected.

Melanie Musson is a car insurance expert who writes and researches for the insurance comparison site, CompareCarInsurance.com. She enjoys keeping up on vehicle trends and technology.