Another pain point for American motorists: car insurance costs

Soaring gas prices are not the only cost that American drivers are struggling with these days. Insuring a car now costs about $ 700 more than for the coronavirus pandemicindustry data shows.

The typical motorist will spend $ 1,771 on car insurance this year, nearly $ 100 up from 2021, according to a new Bankrate study. But that is sharply up from 2019, when annual premiums totaled $ 1,070, according to the National Association of Insurance Commissioners. This increases the cost of car ownership, while at the same time making buying, maintaining and refueling a car more expensive.

“Households’ transportation budgets are already under significant financial pressure amid the highest inflation in 40 years, and almost every facet of driving is becoming more expensive,” Bankrate analyst Sarah Foster said in a statement.

Gas prices, that hit a record high from $ 4.33 per gallon on March 11, now averaging about $ 4.22. Meanwhile, the average price of a new car has risen by 12% from a year ago, reports the US Labor Department. A typical new car now costs $ 46,404, according to Kelley Blue Book. The price of used cars has increased by a staggering 41% over the past year and is now average about $ 29,000Edmunds data shows.

The Bankrate study surveyed the nation’s 25 largest cities to determine where drivers pay the most on auto insurance as part of their annual income. It found that motorists in Boston and Seattle paid the least, at about 1.3% and 1.5% respectively. Drivers in Miami and Tampa, Florida, face the steepest car insurance costs at 5.5% and 5% of their income, respectively, according to Bankrate.

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“Drivers have many different routes to reduce their car insurance costs, and the urgency is even higher for those living in Miami, Tampa or Detroit, where drivers spend nearly twice as much of their income on insurance than it does. national average, “Foster told CBS MoneyWatch. “” At the end of the day, insurance does not have one-size-fits-all. Each company will offer something different, which means comparison shopping is the single most important step in making sure you do not leave any money on the table. “

In general, the rate of car insurance of a driver is based on the car, the driving record of the person, where they live and other factors. Bankrate also found that adding a teenager to the policy, getting a speeding ticket and having a low credit score often increases the cost of car insurance.

There were fewer drivers on the road by 2020, as COVID-19 led millions of Americans to work from home and close businesses. As the driving slowed down, consumer advocacy groups push insurers to give customers back. Allstate, Farmers and others eventually gave at least $ 1 billion back to customers,

Insurance costs are now rising again as Americans hit the road and accident rates climb, according to the Insurance Information Institute in New York. Higher premiums reflect the rising cost of auto parts as the pandemic continues to drive global supply chains, the group noted last month.

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