Trump Tariff ‘Chain Reaction’: America’s car and automobile insurance payments may rise 24 billion dollars
Even if you are not in the market for a new car, US President Donald Trump’s25% tariffs in automatic importsIt can make someone more expensive.
It is estimated that new taxes that will start on April 3 and expand in the following weeks will increase the average cost of a car imported from another country.thousands of dollars. However, it is expected to be more expensive for vehicles currently using foreign -made parts and consequently will have more increase insurance costs.
The White House says that these tariffs will encourage domestic production and increase 100 billion dollars annually.Economists StressForcing the global supply chain of the automobile industry brings significant cuts. Dealers and automobile repair workshops will have other options than raising prices – leading drivers throughout the country to make more payment for daily care.
Here’s what you need to know.
How will the tariffs affect my next car repair?
It depends on what you need and where you enter your car to get service. However, some industrial analysts warn that drivers can see that costs jump up early for the next weeks or months.
“If you bring your car to repair your car, you have a chance, it will play a role from another country, J “This price you pay will probably be directly affected by the increase (from these tariffs).”
Trump WednesdayAuto Tariffs DeclarationIn particular, it refers to engines, transmission, power transfer organ parts and electrical components. This includes a lot of repair as in Caldwell, and management also pointed out the possibility of future expansion.
And car manufacturers can develop new pricing strategies for new vehicles affected by tariffs, while Caldwell expects lower probability of sucking the costs of individual parts – this is perhaps close to consumers.
Most of the automobile repair market was based on imports, especially from America’s largest trade partners. Compared to February, the number from the American Propertial Ralese Insurance Association, a trade group representing homes, automobiles and labor insurers, is imported from Mexico, Canada and China from every 10 automatic replacement parts used in the US automobile store repairs.
“Today you cannot enter a dealership and you cannot see a united piece, Sky Cox Automotive Product Consultancy Director Skyler Chadwick said. However, supply and supply vary between each servant, adding, making these tariffs more complicated when the prices will rise fully after entering.
Crown’s Corner, a auto repair and mechanical store in Georgia, said Desiree Hill, owner of Corner, said that automobile tariffs already damage their business. Vintage was trying to repair Opel Record Car and ordered a piece from Germany, but the manufacturer canceled tariffs for tariffs.
“I can’t get any (part) anywhere in our country. The period. Thus, this was very disappointed.
Approximately half of the cars it works on are foreign production, so tariffs will make it difficult to repair these cars.
“Unfortunately, we have no choice but to raise the prices if it is upgraded to us,” he said. “We can’t get such a loss.”
Car repair prices have been increasing for years, analysts point to both increasing labor costs and more expensive components required for advanced technology vehicles.
Edward Salamy, General Manager of Automotive Body Parts Association, said that automobile companies are trying to “win monopoly ve to limit drugs to their own parts or processes and reduce options for consumers.
“Most of these distributors have no choice but to increase the list prices.”
How are car dealers managed?
Joshua Allrich, who runs a used automobile dealership in Atlanta, a family dealer, is one of those who are worried about encountering higher costs while trying to save their customers’ money.
“It will make things much more expensive, Al Allirch said, while looking forward to the possibility of people who hurried to buy a car before the tariffs come into force, he added that his work will soon be able to adapt. “Wheelhouse is economic cars, affordable cars. And now, this tariff will hit us directly because things will rise.”
Chadwick says that while dealers and other servants are preparing to make difficult conversations about increasing prices with customers, these tariffs should be as transparent as they enter into force.
He added that the tariffs will pressure the sales market again. Used cars usually open the door for higher repair costs due to tariffs. And “all this cost returns to the consumer”, with what they have to pay for the vehicle.
In efforts to delay effects, some dealers and repair workshops may tend to stock up in the inventory before hitting the tariffs, especially for the most demanded parts. Analysts say that many have long been waiting for the threat of automatic tariffs and Trump is already struggling with the effect of a new one.Steel and aluminum taxesHe entered into force at the beginning of this month.
However, stocking can only go so far. And for small business owners, spending too much money for a lot of inventory at once, especially Trump’sAgain, Discharged Tariff ThreatsAsk questions about how long they will take.
If they are short -lived, Caldwell said, “Do you really want to buy a group of inventory you need to sit for a while?” He said.
What will happen to my insurance premiums?
As accidents containing new parts will see increased costs for repair, insurance premiums will also increase due to tariffs.
But this may be far from the future. Bob Passmore, Deputy Head of Personal Lines Department of the American Property Insurance Association, expects consumers to see at least one effect on insurance invoices in 12 to 18 months. The reason for this is that increasing prices reach the demand costs and then apply after new rates are opened and approved.
Nevertheless, he estimated that the demands of Personal Automobile Insurance on his own could rise between $ 7 billion and 24 billion dollars a year alone.
It was not immediately clear how much the auto insurance providers were prepared for the effects of these tariffs. Allstate, State Farm, Geico and Progressive did not respond immediately to the requests of the Associated Press on Friday.
However, even if it took a long time to drip, hikes related to this tariff would come again as consumers already encountered increasing insurance costs. The Insurance Institute estimated that average US automobile premiums increased by 14% in 2023 and 12% in 2024.
Mark Friedlander, Senior Director of Media Relations of the Institute, said that the non -profit organization of the research trade envisaged a 7% premium increase for automobile insurance at the beginning of the year in 2025, but this explained the potential tariff effects that raised them.
Caldwell adds that increasing costs from tariffs caused “chain reaction for insurance .. “This is the increase in total ownership cost rather than just a purchase increase.”
This story initially took part in Fortune.com
