Tariffs to Drive Up Car Insurance Prices: Five Strategies to Save on Premiums
Updated: April 9, 2025
By Liz Knueven | @lizknueven
The tariff war grows strong. Insurify, an insurance study group, finds new 25% tariffs on cars and parts raise costs. The study shows premiums jump by about 8%. The average cost moves from $2,313 to near $2,502 by the end of 2025. ## Economic Impact of Tariffs on Car Insurance
Tariffs started on April 3, 2025. They add to rising inflation costs. Insurify says that even without tariffs, premiums would climb by about 5%. Higher auto part prices push repair and replacement costs higher. The U.S. relies on parts from Canada and Mexico. Tariffs thus make rates go up.
Tariffs on steel and aluminum add more strain too. Half of U.S. aluminum comes from Canada and Mexico. Thirty-five percent of steel also comes from these neighbors.
Price changes may not hit you right away. Companies adjust rates only when you renew. States must approve any increase. Experts warn that you might feel these effects before year’s end.
Five Ways to Save on Car Insurance
Despite higher prices, you can act to save on auto insurance.
1. Shop Around and Compare Quotes
Insurers judge risk in their own way. They offer different prices for the same coverage. Get quotes from several companies. Make sure each quote uses equal coverage and deductibles. Experts say you should check prices at every renewal.
2. Increase Your Deductible
Raising your deductible cuts your premium. The Insurance Information Institute shows that increasing from $200 to $500 can lower costs by up to 30%. Choose a higher deductible only if you can cover the cost if an accident happens.
3. Pay Your Annual Premium Upfront
Many insurers add fees for monthly plans. If you pay your full premium at renewal, you may earn a discount. For example, Auto-Owners Insurance offers savings for upfront payments.
4. Improve Your Credit Score
Your credit score affects your insurance rate. A high score tells insurers you are low risk. Work to improve your score by paying bills on time and reducing debts. This step can help lower your premium.
5. Bundle Policies
Consider buying car, home, or renters insurance from one company. Many insurers lower rates if you hold several policies with them. Bundling helps you save more overall.
Conclusion
Tariffs now push up car insurance rates. Consumers must act to lessen the cost. By comparing quotes, raising deductibles, paying upfront, improving credit, and bundling policies, you may secure better rates. Stay alert and adjust as you need. With these steps, you can handle rising auto insurance costs more easily.
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