Soaring gas prices aren’t the only expense American drivers are grappling with these days. Insuring a vehicle costs around $700 more today than it used toindustry data shows.
The typical motorist will spend $1,771 on car insurance this year, up nearly $100 from 2021, according to new Bankrate research. But that’s up sharply from 2019, when annual premiums totaled $1,070, according to the National Association of Insurance Commissioners. This increases the costs of owning a car at the same time that buying, maintaining and refueling a vehicle also becomes more expensive.
“Household transportation budgets are already under significant financial strain amid the highest inflation in 40 years, and almost every aspect of driving is becoming more expensive,” said Bankrate analyst Sarah Foster. in a press release.
Gas prices, whichfrom $4.33 per gallon on March 11, the current average is around $4.22. Meanwhile, the average price of a new car is up 12% from a year ago, the US Department of Labor reports. A typical new car now costs $46,404, according to Kelley Blue Book. Used car prices have risen 41% over the past year and now average show data from Edmunds.
The Bankrate study looked at the nation’s 25 largest cities to determine where drivers pay the most for car insurance as a proportion of their annual income. He revealed motorists in Boston and Seattle pay the least, at around 1.3% and 1.5% respectively. Drivers in Miami and Tampa, Fla., face the highest auto insurance costs, at 5.5% and 5% of their income, respectively, according to Bankrate.
Rising auto insurance rates are “inflation hidden in plain sight,” Foster told CBS News on Monday.
“Drivers have many different routes to reduce their car insurance costs, and the urgency is even greater for those living in Miami, Tampa or Detroit, where drivers spend almost twice as much of their income on insurance. than the national average,” she said. . “Ultimately, insurance doesn’t have a one-size-fits-all solution. Every company will offer something different, which means comparing prices is the most important step to making sure you don’t leave a mess. ‘money on the table.’
In general, a driver’s car insurance rate is based on the vehicle, the person’s driving record, where they live and other factors. Bankrate also found that adding a teenager to the policy, getting a speeding ticket and having a low credit score often increase car insurance costs.
There were fewer drivers on the road in 2020 as COVID-19 drove millions of Americans to work from home and shut down businesses. As the ride diminished,insurers to reimburse customers. Allstate, Farmers and others eventually .
Insurance costs are rising again as Americans hit the road and accident rates rise, according to the Insurance Information Institute of New York. Higher premiums reflect the rising cost of auto parts as the pandemic continues to rumble through global supply chains, the group noted last month.