Auto insurance rates have seen the largest year-to-year spike since 1976. The cost of motor vehicle insurance increased 20.6 percent in the last year, and January alone saw a month-on-month rise of 1.4 percent. This escalating cost has played a marked role in tempering early-year optimism regarding inflation.
A recent private-sector estimate revealed that the average annual full-coverage car insurance premium for 2024 is $2,543. This contrasts sharply with 2023’s figure of $2,014 and the 2022 figure of $1,771.
This rise in insurance premium costs is rooted in multiple factors, but the main driver of increased costs is simple. As the costs of motor vehicles themselves have increased substantially, so too has the cost to ensure them. Between January 2020 and January 2024, the average cost of a new vehicle rose over 20 percent. The cost of used cars rose even more and the cost of vehicle repair increased 32 percent. Another major factor in rising auto insurance costs was the Federal Reserve’s decision to significantly increase in interest rates beginning in 2022.
The struggles Americans now face in owning and insuring their vehicles is just one factor in Americans’ negative view of the economy, despite the Biden administration’s claims to the contrary. The daily struggles faced by most Americans due to inflation and Bidenomics have even seen a sharp drop in support for the Biden regime among Gen Z and Millennials, once core constituents.
