If you think the cost of a car has gotten expensive, wait until you go to insure it.
Auto insurance rates are up nearly 15% in some states over the past year, while nationwide premiums have risen more than $240 on average to $2,014 a year, according to comparison site Bankrate. And the increases aren’t over. U.S. rates are expected to rise by an additional 8.4% in 2023, which would outpace current inflation at 4.9%, and represent the largest increase in six years, according to consumer research and finance site ValuePenguin.
The rising insurance costs come as consumers are struggling financially after nearly three years of high inflation and surging car prices. Eleven percent of drivers now pay more for car insurance than car payments, and 7% spend more on insurance than household utilities, a report from insurance platform Autoinsurance.com shows.