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Auto insurance costs soar by 20% in the US

In this file photo, morning traffic begins to swell on the 101 Freeway in Los Angeles' San Fernando Valley. (Al Seib/Los Angeles Times/TNS)

There’s no relief in sight for U.S. car owners who’ve faced soaring costs of maintaining a vehicle in the past two years.

Prices of motor-vehicle insurance rose 20.3% in December from a year earlier, the biggest jump since 1976, according to the Bureau of Labor Statistics. That was the 16th straight month of annual gains exceeding 10%.

And insurance rates will probably keep on rising, propelled by higher costs of replacement parts and repairs, Bloomberg Intelligence analysts said last month.

Prices of used cars and trucks have come down from their peaks two years ago. But the December consumer-price index released Thursday showed an uptick in used-vehicle costs from the previous month, defying economists forecasts for a decline. The surprise monthly increase in that category was among the main drivers of a acceleration in the overall rate of inflation.

Even after a drop in 2023, used-vehicle prices remain up 38% since the start of the pandemic. As for new cars and trucks, prices are not increasing nearly as much as they did in 2022. On an annual basis, they were up only 1% in December.


© 2024 Bloomberg L.P

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