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Which are the cheapest cars to insure in 2022?

Which are the cheapest cars to insure in 2022?

Annual auto insurance rates in the US average $1,771 for a full year of coverage, according to bank rate‘s latest figures, but data obtained by the consumer financial services company point to rate hikes across the country through 2022.

Auto insurance premiums rise by an average of 4.9% nationwide based on approved rate filler data between January 1 and May 18 of S&P Global Market Information. If the trend continues, consumers could soon pay as much as $1,858 a year for the same coverage, Bankrate noted, adding that the price hikes are expected to affect more than 62.5 million policyholders.

The company attributed the increase primarily to inflation, which the company described as the “biggest driver of higher auto insurance premiums for 2022.”

“Perhaps the biggest motivation of [the rate increases] is the same thing that drives up costs across the board — inflation,” Bankrate wrote in its analysis. “Between June 2021 and June 2022, the consumer price index (CPI) rose 9.1%. This means that we spend on average 9.1% more than a year ago for the same goods and services.

“While auto insurance is certainly not the most drastic increase — fuel, energy commodities and airline rates take the top spots — the increase still has the potential to put a further strain on consumers’ wallets.”

Bankrate added that other factors that have a direct impact on car premiums are also “affected by inflation”. These include car prices and health care costs.

“The price for new cars and trucks has increased by 11.4% between June 2021 and June 2022, while the market for used cars and trucks has increased by 7.1%,” the company explains. “Vehicles are also much more complex than they used to be, adding to the total cost of ownership. Even minor accidents can cause hundreds or thousands of dollars in damage to delicate electronics that require specialized repairs.

The latest available data from the Centers for Medicare & Medicaid Services (CMS), meanwhile, has shown a 9.7% increase in health care spending in 2020, indicating higher medical costs compared to previous years for someone injured in a vehicle accident.

The situation could prompt many motorists to opt for cheaper coverage, something Bankrate warned about.

“You may be tempted to lower your coverage to save money, but insurance professionals advise against this strategy,” the company warned. “Car insurance is designed to protect your finances in the aftermath of accidents, and lowering your coverage can lead to higher bills of your own. In an inflationary economy where almost everything costs more, good car insurance can help…

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