Sick of reading about inflation hitting every single thing on planet earth? (So are we.) But it’s a huge train wreck, and we just can’t seem to look away.
Inflation numbers are getting bad—like record-breaking bad. And most of us have never had it hit our budgets like this before. Food. Gas prices. The cost of that stuffed animal for your 3-year-old niece . . . everything.
And now the grim reaper of inflation has come to car insurance premiums.
But before you panic and ditch your gas-guzzling car for a good old-fashioned horse, there’s good news. With a few simple strategies, you might be able to pay less for car insurance and keep more of that moola in your pocket.
What Is Inflation?
Inflation is when the cost of stuff goes up. You know that candy bar that used to cost 25 cents at your local gas station? Now it’s $1.50? That’s inflation.
As of February 2022, the inflation rate in America rose to 7.9% over the last 12 months.1 This is Guinness World Records stuff—the biggest inflation spike in nearly 40 years.
And of course, drivers are seeing their wallets shrink as gas prices and the costs of owning a car go up.
Why Are Car Insurance Premiums Going Up?
Cars cost more—used or new, electric, hybrids or diesel-guzzling trucks. All of ’em.
According to the Bureau of Labor Statistics, a new car costs 12% more than it did a year ago.2 Ouch. “But that’s no problem,” you say, “I’ll just buy a used car.” Yes, you should! But the tough news there is that used cars cost 41% more than they did a year ago.3 Double ouch.
You can thank microchip shortages and fewer auto workers for lower car and truck inventory—and soaring car prices. Plus, the shortage of parts is fueling an increase in the cost to repair vehicles too.
All of this is what’s called a triple whammy for your transportation budget—you’re paying more at the pump, more for a vehicle, and more for car insurance.
Most of this is out of your control. But there is something you can control . . .
3 Tips to Save on Car Insurance
There are actually a bunch of ways to save money on car insurance—here are three. (Also check out our free checklist on even more ways to save.)
1. Cut Add-Ons
Imagine ordering a dessert at a restaurant but knowing you won’t get to eat it. Or buying something online that will never be shipped. Well, buying add-ons to a car insurance policy is a little like that. With a fully funded emergency fund, you can drop extras like emergency roadside assistance or rental car reimbursement and keep more cash in your pocket. You can even drop collision coverage if you have an older car that’s paid off and you have enough savings to buy a new one.
2. Bundle and Save
3. Go Shopping!
No, we don’t mean for a new purse or smartphone. We’re talking about shopping for a better auto insurance rate. This is one of the best ways to cut back on car expenses.
You could do it all by your lonesome, spending late nights comparing quotes and researching companies. But that might just put you to sleep, and you still wouldn’t have a new rate.
There’s a better way.
Don't let car insurance costs get you down! Download our checklist for easy ways to save.
Let our independent insurance agents shop for you. With just a little information, they’ll take off like a hound dog in search of the best policy at the best price.
Don’t let gas prices, inflation and insurance premiums get you down. Take control of your budget and see if you could save on your car insurance premiums.
Connect with an ELP today to see if you could pay less for car insurance.