Trump's Tariffs May Increase Your Car Insurance Costs in 2025 | Carscoops

      An increase in the cost of auto parts could lead to higher repair costs, resulting in larger premiums, according to Insurify.

      Car insurance rates may unexpectedly rise under President Trump.

      Import tariffs might increase the prices of parts, and consequently, repairs.

      According to Insurify, premiums could rise by 3 percent by the end of 2025.

      If you think car insurance is already a financial burden, 2025 could add more strain during renewal time. Insurance premiums might surge if President Donald Trump implements his proposed tariffs on goods from Canada and Mexico, which could take effect soon.

      What connection do import taxes have to your insurance costs? It turns out, a significant one. These tariffs could inflate the price of car parts, making repairs more costly, as noted by the price comparison site Insurify. When repairs become more expensive, insurance companies don't cover the costs themselves; they pass those costs on to consumers like us.

      The Impact of Tariffs on Car Repairs

      A large portion of the components used for vehicle repairs—such as bumpers, fenders, transmissions, and even small trim pieces—are sourced from Canada and Mexico.

      Approximately 60 percent of auto parts utilized in U.S. repairs are imported from Mexico, Canada, and China, as reported by the American Property Casualty Insurance Association, which was cited by CNBC. Some parts even cross the border several times before being installed in a vehicle. If tariffs are implemented, the cost to import these parts will increase.

      And who else will feel the financial impact? Repair shops. When they charge insurance companies more for fixing a damaged vehicle, those increased costs are passed down to customers through higher premiums. Therefore, a minor accident that could have been a mere inconvenience in 2024 might result in a more significant financial burden in 2025.

      How Much More Will You Pay?

      The good news is that while premiums may rise, we’re not looking at them doubling. Insurify predicts premiums could increase by 8 percent to an average of $2,502 by the end of 2025 if tariffs are in place, compared to a 5 percent rise to $2,435 without them.

      What exact tariffs Trump intends to impose, when they will take effect, and what specific items they will impact remain uncertain. He previously threatened a 25 percent tariff on goods from Canada and Mexico, initially stating it would start on February 1, but later postponed it to March 4, and now it’s set for April 2.

      So, while there's no need to panic, it may be wise to prepare for a slightly higher insurance premium. If the tariffs are enacted, that minor scratch on your bumper could end up costing more than you expect.