Tariffs Are Set to Drive Up Car Insurance Rates: Here Are 5 Ways to Save on Premiums
Tariffs hit car imports. They push up insurance costs. A study from Insurify shows tariffs can speed up rate climbs by 60%. Premiums average 8% higher by 2025. Costs move from about $2,313 to $2,502 per year.
Impact of Tariffs on Car Insurance Costs
A 25% tariff now hits cars and auto parts from Canada and Mexico. This tariff forces parts’ costs higher. The United States depends on its neighbors. Higher parts cost makes repairs and replacements more expensive.
Tariffs began on April 3, 2025. New auto parts tariffs start May 3, 2025. Extra tariffs on steel and aluminum add to the rising cost. About 50% of aluminum and 35% of steel used in U.S. vehicles come from Canada and Mexico.
Even without new tariffs, rates would still rise by about 5%. Many drivers feel changes only at policy renewal. State regulators must give a nod to any rate hike.
Five Strategies to Save on Car Insurance
Drivers can act now to lower expenses. Try these five ways:
1. Shop Around and Compare Quotes
Call several insurance companies. Each one weighs risk in its own way. Ask for quotes with like coverage and deductibles. This practice gives a fair match. Experts say to shop at every renewal.
2. Increase Your Deductible
Your deductible covers part of repair costs. A higher deductible can drop your premium. For example, moving from $200 to $500 can cut rates by 30%. Make sure you can handle a larger out-of-pocket cost.
3. Pay Your Annual Premium Up Front
Monthly fees often come with extra charges. Paying in one sum can save money. Auto-Owners Insurance gives a discount for paying full at renewal.
4. Improve Your Credit Score
A strong credit score can lower your premium. Insurers count credit as a risk factor. It takes a few months to boost your score, but the savings add up.
5. Bundle Car and Home Insurance
Buy both policies from one provider. Bundling makes managing bills easier. Often, it also cuts the overall costs.
Conclusion
Tariffs drive up car insurance costs. Now is the time to check your policy. Shop for better rates, raise your deductible, pay up front, and work on your credit. Bundling your policies may also help. These steps make rising premiums easier to manage.
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