Tariffs, Rising Costs Expected to Hike Car Insurance Prices by 8% by 2025

The recent tariffs implemented by President Donald Trump are expected to significantly impact car prices and insurance rates in the U.S. Insurify projects a 26% increase in car insurance rates for 2024, with tariffs potentially accelerating this rise, adding around 3% to the costs. On the vehicle purchase front, J.D. Power estimates that tariffs could increase the price of new cars by about $6,000, which reflects a potential 9.2% rise given the current average price in Canada. Insiders note that the auto industry, already grappling with inflation, may face further challenges as the tariffs take effect. The uncertainty surrounding these tariffs is causing concern among economists and industry leaders alike, making it difficult to predict the full extent of their effects. Overall, the combination of rising input costs and tariffs is prompting many automakers to announce price hikes in both new and used vehicles.