Recently we had a customer call in to let us know that he had sold one of his cars and that he would like the vehicle removed from his policy. While talking to the customer he mentioned that he sold the vehicle for $4,000 more than what he paid for it. While that is great news for him it underscores a potential issue in the auto insurance marketplace that we expect will trickle down to you, the consumer, later this year.
You see, the price of auto insurance is largely determined by the actual cash value of the vehicle being insured. In normal markets, the actual cash value of a vehicle depreciates which is why the cost to insure a 1992 Camry is less than the cost to insure a 2022 Camry. However, with all of the supply chain and labor supply issues facing the auto industry, we’re actually seeing these inflationary pressures increase the values of used cars.
Naturally, the appreciation of a vehicle being insured will result in the cost of auto insurance increasing as well. This means that 2022 could be a bumpy ride for auto insurance.
Want to see what insurance rates look like in your area? Get a quote online at shopitnow.chrinco.com or give me a call at 321-586-3754. Chrinco.com – Insurance Simplified.
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