Tariffs on Auto Parts Set to Raise U.S. Car Repair and Insurance Costs

The extension of 25% tariffs on imported vehicles to foreign-made auto parts by May 3 is poised to increase overall costs associated with car ownership in the U.S., including repairs, insurance premiums, and prices of both new and used cars. Insurance companies anticipate that higher auto parts costs will drive up repair expenses, potentially increasing average car insurance bills by over $300 annually. The impact is expected to be more significant in states like New York and Florida, especially if existing parts supply shortages worsen.

Although there is discussion about temporarily relieving some tariffs on the auto industry, experts caution that short-term pauses are unlikely to allow automakers enough time to adapt their complex global supply chains. Overall, these tariff-related cost increases create challenging regulatory and market conditions for insurers, automotive manufacturers, and consumers alike, emphasizing the interconnectedness of trade policy and insurance underwriting costs.