See How Much Auto Tariffs Could Raise Your Car Insurance Rates

Car insurance prices are already high. It appears, they're about to surge higher.

This is due to news from president Donald Trump, who previously announced he will levy a 25% auto tariff on imported vehicles.

This policy could have far-reaching influence, given how much U.S. automakers rely on foreign countries for car assembly and parts. Reuters reports the U.S. imported $474 billion worth of car products in 2024.

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How does Trump's tariffs impact car insurance?

When tariffs go into effect, it makes imported goods, like cars, more expensive. In turn, companies pass some of the extra costs to customers.

As costs for cars increase, insurance rates follow suit. If a vehicle costs more to make, then it's natural that replacement or repair costs will also be more expensive. Especially when you factor in we receive many car parts from other countries.

On top of this, it could create a feeding frenzy that drives up demand and cost before tariffs go into effect.

"Looking ahead, the newly announced tariffs on imported vehicles add another layer of difficulty for shoppers already facing high prices and interest rates,” said Ivan Drury, Edmunds’ director of insights.

"Now, tariffs will either be pushing up prices, or in the case of brands that are trying to absorb the cost of the tariffs temporarily, like BMW, consumers are likely to feel even more pressure to buy quickly," adds Jim Patterson, managing editor of The Kiplinger Letter. "So we'll see some combination of higher prices and more urgency to buy."

Car insurance prices raise by 8% in 2025

Insurify looked into how a 25% auto tariff would influence car insurance costs. They found that if implemented, it would raise full policy car insurance prices by at least 8% by the end of 2025.

Now, to be fair, car insurance prices were increasing anyways. Insurify reported even without tariffs, premiums will rise by 5% on average.

So, what's driving the extra 3%? It's the extra costs the tariffs add to cars. Wolfe Research estimates the auto tariff will increase auto prices by $3,000 per vehicle on average.

How do I save when car insurance keeps rising?

One of the best ways to save on car insurance is to reshop it. Even after you had a policy with the same provider for a few years, it makes sense to take a fresh look at other providers to see if you're overpaying.

Using this tool from Bankrate, you can shop for a new policy quickly:

Also, if you plan to buy a new vehicle before tariffs go into effect, it's a wise idea to obtain an insurance quote before doing so. Getting quotes can help you see how a new vehicle influences your car insurance premiums.

Another tip is to shop around right before your policy renews. This allows you enough time to compare quotes from multiple providers, so you can find the best coverage options that align with your budget and coverage needs.

The bottom line

President Donald Trump announced a 25% auto tariff on all imported vehicles and parts.

This policy won't only have the impact of raising car prices, but it's likely to raise your car insurance rates too. By being proactive and shopping for rates before policy renewals or buying a new vehicle, you can find the right coverage options to match your budget, while minimizing overpaying.

Related content

• Here's How to Reshop Your Car Insurance
• States With the Highest Car Insurance Increases: Is Yours One of Them?
• Trump's Tariffs Could Spike Gas Prices: Here's How to Save