In March, the cost of car insurance experienced a significant rise, increasing by 2.6% and marking a 22.2% surge over the past year, the largest annual increase since 1976. This spike in car insurance and repair costs has been highlighted as a critical factor contributing to the recent uptick in inflation. Over 90% of U.S. households, which own a car, are affected by these rising costs. The increase in vehicle repair costs, which went up by 11.6%, along with the insurance rates, have been identified as key drivers of March's inflation. The complexity and higher costs associated with car repairs, due to advanced technology in vehicles, have significantly impacted auto insurance rates and repair costs, outpacing the overall Consumer Price Index (CPI) gains since 2021.
Auto insurance inflation up 22% YoY seems like the biggest red flag from CPI data this morning https://t.co/rX70tLQGBW
An underappreciated driver of inflation relates to cars, which have become more technical and more costly to fix, which is showing up in auto insurance rates (white line) and repair costs (blue line). Gains in those areas have far outpaced the broad #CPI (red line) since 2021 https://t.co/x9Uusixzta
Automobile insurance emerges as driver of March’s inflation pickup https://t.co/LEwdeCcsBU
It's hard to overstate what a crisis the surge in car insurance and car repair is. Over 90% of US households own a car. Vehicle insurance is up +22.2% in the past year -->The largest jump since 1976 Vehicle repair is up +11.6% https://t.co/0wO0LtYmB7
Car insurance jumped 2.6% in March, up 22.2% over the year