diff --git a/lib/manager/npm/extract/__snapshots__/index.spec.ts.snap b/lib/manager/npm/extract/__snapshots__/index.spec.ts.snap
index 887e3be176c5c038dacf2270269a1f73fbe768cf..e0b886ce2fb95c2710cae76a93e24a4e07f565a9 100644
--- a/lib/manager/npm/extract/__snapshots__/index.spec.ts.snap
+++ b/lib/manager/npm/extract/__snapshots__/index.spec.ts.snap
@@ -361,7 +361,7 @@ Object {
   "packageJsonName": undefined,
   "packageJsonType": "app",
   "pnpmShrinkwrap": undefined,
-  "skipInstalls": true,
+  "skipInstalls": false,
   "yarnLock": undefined,
   "yarnWorkspacesPackages": undefined,
   "yarnrc": undefined,
diff --git a/lib/manager/npm/extract/index.ts b/lib/manager/npm/extract/index.ts
index c8c496fb7aea8ec76b41cb60d03b70010ba3f589..7bccc130f11d2a22a48a4834766b06828309254d 100644
--- a/lib/manager/npm/extract/index.ts
+++ b/lib/manager/npm/extract/index.ts
@@ -126,7 +126,7 @@ export async function extractPackageFile(
   let lernaJsonFile: string;
   let lernaPackages: string[];
   let lernaClient: 'yarn' | 'npm';
-  let hasFileRefs = false;
+  let hasFancyRefs = false;
   let lernaJson: {
     packages: string[];
     npmClient: string;
@@ -224,6 +224,7 @@ export async function extractPackageFile(
 
     if (dep.currentValue.startsWith('npm:')) {
       dep.npmPackageAlias = true;
+      hasFancyRefs = true;
       const valSplit = dep.currentValue.replace('npm:', '').split('@');
       if (valSplit.length === 2) {
         dep.lookupName = valSplit[0];
@@ -237,7 +238,7 @@ export async function extractPackageFile(
     }
     if (dep.currentValue.startsWith('file:')) {
       dep.skipReason = SkipReason.File;
-      hasFileRefs = true;
+      hasFancyRefs = true;
       return dep;
     }
     if (isValid(dep.currentValue)) {
@@ -345,11 +346,11 @@ export async function extractPackageFile(
   }
   let skipInstalls = config.skipInstalls;
   if (skipInstalls === null) {
-    if (hasFileRefs) {
+    if (hasFancyRefs) {
       // https://github.com/npm/cli/issues/1432
       // Explanation:
-      //  - npm install --package-lock-only is buggy for transitive deps in file: references
-      //  - So we set skipInstalls to false if file: refs are found *and* the user hasn't explicitly set the value already
+      //  - npm install --package-lock-only is buggy for transitive deps in file: and npm: references
+      //  - So we set skipInstalls to false if file: or npm: refs are found *and* the user hasn't explicitly set the value already
       logger.debug('Automatically setting skipInstalls to false');
       skipInstalls = false;
     } else {