Beat Rising Car Insurance Rates: 5 Essential Tips to Save as Tariffs Hit Premiums

Tariffs Expected to Drive Up Car Insurance Costs: Tips for Saving on Premiums

By Liz Knueven
Published: April 9, 2025

Tariffs raise car insurance costs in the United States. The U.S., Canada, and Mexico set new tariffs. They add 25% on vehicles and auto parts. This change pushes premiums up by about 8% by year’s end. The average annual premium in the U.S. climbs from $2,313 to $2,502. ## Reasons Behind the Increase

The auto industry depends on parts from nearby countries. Tariffs make these parts cost more. More expensive parts mean higher repair bills. Insurance rates must also rise. Tariffs on steel and aluminum worsen the cost. Canada and Mexico supply about half of the aluminum and over one-third of the steel.

Global tariffs on vehicles and parts started on April 3, 2025. Extra duties on auto parts begin on May 3. Even without these tariffs, rates might have risen by 5%. Insurers adjust rates only when policies renew. Experts warn that cost changes appear by the end of the year. Regulators must approve any major rate hike.

Five Ways to Save on Car Insurance

Bracing for higher premiums, use these ways to save money:

1. Shop Around and Compare Quotes

Insurers score risk using driving history and vehicle type. Gather quotes from several companies. This step lets you find the most competitive rate for the same coverage. Experts say to compare quotes at each renewal.

2. Increase Your Deductible

Your deductible is what you pay before insurance helps with repair costs. A higher deductible usually means lower premiums. Raising your deductible from $200 to $500 may cut costs by up to 30%. However, be sure you can pay more in case of a claim.

3. Pay Your Annual Premium Upfront

Monthly payment plans might include extra fees. Paying the full annual premium at once can avoid these fees. Some companies even offer discounts for upfront payments.

4. Improve Your Credit Score

A strong credit score often brings lower insurance rates. Pay bills on time, lower your debts, and keep credit use low. A better score can mean better premiums.

5. Bundle Car and Home Insurance

Bundling allows insurers to lower your overall cost. Many companies offer a discount when you have more than one policy. This tactic can simplify your payments and save money.

Conclusion

Tariffs on auto parts and materials push up insurance fees. Consumers must take early steps to control costs. Use these tips to lessen the impact of rising premiums. As the situation changes, stay informed and adjust your coverage needs.

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