Tucker said Kelley Blue Book recently added insurance advice to its buying guidelines, advising customers to acquire quotes before investing. Car insurance costs vary nationwide due to local collision repair shop prices and tropical storm and wildfire risk.
The average U.S. full auto coverage cost climbed 24% last year to little over $182 a month, according to Insurify. The business predicted a 7% rate increase in 2024 after 63% of drivers saw rates rise in 2023. That number could climb.
"We're seeing a lot of activity in (the first quarter) that indicate it may increase even more," said Insurify data specialist Jessica Edmondson.
Insurance is part of the whole cost of owning a car, which includes routine maintenance, taxes, depreciation, and gasoline. It appears to be growing. In 2019, Kelley Blue Book estimated that insurance made up 16% of this figure for a tiny car, rising to 26% in 2024. The 2019 compact SUV rate was 13%; this year it will be 20%.
Multiple factors have driven the rate increase. More automobiles are being totaled and quality faults increased due to pandemic production disruptions that can lead to insurance claims.
A mechanic shortage has made car repairs slower, which raises insurance company rental car costs for policyholders waiting for repairs. Electronics in modern cars make them more expensive and harder to fix.
"A bumper is just a bumper - but a bumper full of sensors costs more to repair," said Federal Reserve Bank of Chicago policy advisor Kristin Dziczek, an automobile industry trends expert. Electric cars cost 30% more and take longer to repair, she said.
Other automakers follow. Cadillac now makes a 16-gigacasting model. According to Davis, the Dallas real estate agent who bought a Cadillac, bundling his vehicle and house insurance and raising the deductible made it cheaper.
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