How Rising Insurance Rates are Impacting Vehicle Ownership
As the costs associated with owning a vehicle continue to climb, insurance rates have become a major pain point for many consumers. Tim Jackson, the Former President and CEO of the Colorado Automobile Dealers Association, recently appeared on “Inside Automotive” to discuss how those rising costs are affecting the market.
Key takeaways from the discussion include:
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Insurance Costs as Significant Barrier: Jackson highlighted that increasing insurance costs are becoming a crucial factor impacting the affordability of owning a vehicle. Consumers, already struggling with high vehicle prices and rising maintenance expenses, are even more disadvantaged by the insurance rate hikes.
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Advanced Technology’s Repair Impact: The integration of advanced technologies in modern vehicles—especially electric vehicles like those produced by Tesla—has driven up repair costs. Jackson observed that the increasing complexity and proprietary nature of these technologies often require repairs to be conducted by the manufacturers, which considerably increases the burden on consumers.
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Total Monthly Expenses Soar: With the average price of new cars approaching $50,000 and used cars exceeding $35,000, along with elevated fuel prices, the increase in insurance premiums pushes the total monthly automotive expenses beyond $1,000 for a significant number of consumers. This strain on affordability could potentially exclude specific market segments from the possibility of buying new, safer, and more technologically advanced vehicles.
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Regional Disparities: A survey conducted in Colorado provided insights related to regional variations in vehicle ownership costs. Factors like higher parking expenses and housing costs in metropolitan areas can increase the financial pressures on car owners. These regional differences underscore the broader economic consequences of increasing automotive expenses.
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Future Mobility Options: Jackson’s book, Dude, Where’s My Flying Car?, explores future mobility options beyond traditional automobiles. The book covers many solutions from electric bikes to adventure vans, including the futuristic idea of flying cars. The range of potential choices shows evolving consumer preferences and technological developments shaping private transportation’s future.
“Inflation is affecting certain aspects of society more than others. It’s affecting collision repairs in automotive, especially with the new electric vehicles like Teslas.”
– Tim Jackson
