Beyond inflation: Why car insurance rates are expected to rise in 2023
From a shortage of vehicle parts to retiring mechanics, auto insurance rates may rise through 2023
Many Americans saw their car insurance premiums increase in 2022 and some studies project the trend will continue into 2023.
The forecasted rise in automotive insurance costs has a variety of potential causes. These include ongoing supply chain issues throughout the auto industry, a rise in demand for tech-savvy auto repair workers, gas price volatility and more, according to various studies.
"Shortages of parts and new vehicles, waves of retiring mechanics, and deadlier roadways are changing the automotive insurance landscape for insurers and you—the driver," The General Insurance said in a recent study.
The average cost of auto insurance increased by 9% to $1,777 per year in 2022, according to a recent report by Insurify. And it expects the rate to increase by another 7% to $1,895 in 2023.
If you are interested in saving money on your car insurance, you could consider changing your auto insurance provider to get a lower monthly rate. Visit Credible to shop around and find your personalized premium without affecting your credit score.
SPENDING ON AUTO INSURANCE IS UP: HERE'S HOW DRIVERS ARE SAVING MONEY
Auto shop workforce trends may impact insurance costs
The auto repair industry may soon face a major labor shortage as veteran workers retire and the auto industry becomes more technology driven, which can impact the cost of car insurance.
By 2024, the automotive and transportation industry may need to fill about 642,000 technician jobs, according to a 2020 projection by TechForce.
"Dealerships and lobbying groups have struck partnerships with schools and nonprofits in recent years to train the next generation of auto technicians," The General said in its study. "Their jobs have become increasingly technologically advanced as cars are loaded with more computer parts."
The report added, "The costly dilemma for drivers is only anticipated to continue for the foreseeable future at least. The Bureau of Labor Statistics anticipates the number of auto technicians employed in the U.S. will remain roughly unchanged through the end of the decade."
If you are looking to lower your auto expenses, there are ways to lower your monthly car insurance payments such as switching providers. You can visit Credible to compare multiple providers to see if one is right for you.
MORE CONSUMERS SHOPPING FOR NEW AUTO INSURANCE TO SAVE MONEY: J.D. POWER REPORT
Gas price uncertainty can linger in 2023
After gas prices around the country reached record highs in 2022, Americans may see some relief in their car expenses. The yearly national average price for gas in 2023 is expected to dip nearly 50 cents per gallon from the price in 2022 to $3.49, according to GasBuddy’s 2023 Fuel Outlook.
But the organization notes that ongoing issues ranging from the war between Russia and Ukraine to global economic uncertainty may stymie the expected price dip. GasBuddy forecasts a national average of $4 per gallon may be possible ahead of and during the summer driving season.
The national average for a gallon of gas increased by five cents to $3.32 since the week ending January 15, according to AAA reports.
"Gasoline demand is usually lackluster this time of year," AAA spokesperson Andrew Gross said in a statement. "And it likely won’t start to tick up until spring break draws near. So the primary factor in this latest increase is the higher cost of oil, which accounts for more than half of what you pay at the pump."
If you're looking to lower your monthly auto costs, you could consider switching providers. You can visit Credible to get your personalized rate in minutes, without lowering your credit score.
Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at firstname.lastname@example.org and your question might be answered by Credible in our Money Expert column.