The increased value of a modified car is a major factor in determining the cost of insurance for such a vehicle. When you add custom parts to your car, you increase its value and, consequently, its repair or replacement costs in the event of damage or theft. Since the value of a modified vehicle is typically higher than the value of a stock vehicle, insurers factor this into their premium calculations.Insurance rates may change if you make changes to your vehicle that increase its performance, such as installing a new engine, changing the suspension, or adding turbocharging. Because these upgrades often lead to a more powerful and therefore more dangerous vehicle, insurers factor in the potential increase in risk that they pose. Insurers may charge more for a modified car because of the added danger posed by its enhanced performance.While some improvements to safety may result in higher premiums, others may reduce them. Installing safety features like anti-theft alarms, GPS trackers, and advanced driver assistance systems (ADAS) can help lessen the likelihood of theft or collisions. Since these safety features show an intention to reduce risks and losses, insurance companies may reward their use with reduced premiums or discounts.Custom paint jobs, body kits, and aftermarket wheels are examples of cosmetic modifications. Unlike performance upgrades, these modifications typically have a smaller impact on insurance costs. Neither the vehicle’s performance nor its safety have been compromised by these alterations, which are purely cosmetic. However, you should still let your insurer know about any cosmetic changes you’ve made, as they can affect the car’s resale value.