Sky-high car insurance rates? Blame it on all the tech in our cars

January 29, 2025

By Kim Komando

My car insurance just went up 32%. Did I have an accident or get a few tickets? Nope. Across the U.S., the average full-coverage car insurance bill went up 25% last year. In some states, it was closer to 40%. Geez.

The main reason? Today’s high-tech vehicles cost way more to repair. You don’t need to own a high-tech car to feel the pinch, though; it’s hitting everyone.

Driving up costs

Modern cars are packed with dozens of sensors and endless lines of computer code. Combine that with the rising cost of replacement parts and repairs, and voila — soaring auto insurance rates.

No wonder the average collision insurance claim jumped 64% between 2018 and 2022. In 2023, auto insurance rates climbed 20%, the biggest increase since 1976.

The rate increases are slowing a bit, but there’s no telling how tariffs could impact that. About 60% of car parts used in repairs are imported from China.

Let’s look under the hood

In 2018, Toyota redesigned its uber-popular Camry. The number of parts in the front bumper alone increased from 18 to 43. Most are related to advanced driver-assist features.

The upgrades also mean a front-end collision repair is 43% more expensive. It’s not just driver-assist jacking up costs.

• Many new cars have LED headlights, which cost around five times more than halogen lights to replace.
• New cars contain more aluminum. Compared to steel, aluminum is lighter, provides better gas mileage and offers more protection in a crash, but it’s harder to fix and more expensive.
• EVs take 20 days on average to repair. That’s 40% longer than traditional vehicles and $500 more expensive for labor.

Smart ways to save

I make it my business to find the best ways to save. Then, I pass them along to you. Let’s do this.

• Review your current insurance plan and make adjustments to your coverage levels. Raising your deductible could result in a significant decrease in your premium. Keep in mind you’ll pay more out of pocket if you get into an accident.
• Ask for discounts. You might get one if your car has an antitheft system installed, you’re a safe (accident-free) driver or you’ve completed defensive driving courses. Talk to your agent.
• Consider switching to usage-based insurance. If you don’t drive that much or have a relatively short commute, you could pay much less than you would under a traditional plan.
• Bundle your other insurance plans with the same provider. Carrying home, auto, life and even pet insurance under one company means better rates.

The million-dollar question

“Should I install one of those trackers to get a discount?” I wrote all about what they collect here.

In a nutshell: For me, the discount isn’t worth it. Review your plan, talk to your agent, and see how much you’ll really save by letting them know everywhere you go … and every time you hit the gas or slam on the brakes. You know they’ll use and sell the data in so many ways.

🍝 Why does pasta always have to pay so much for car insurance? It can’t drive a car without making it al dente. (That was a good one if I do say so myself.)

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