It’s no secret that auto insurance costs are on the rise. According to consumerreports.com, most consumers saw a cost increase of about 8 percent in 2017.
There are many reasons for the spike. Collision claims rose by 11 percent and comprehensive claims increased by 25 percent for the two years ending June 30, 2017, according to kiplinger.com. This is likely due to the fact that Americans are driving more miles. But the primary reason is that with new cars comes new technology.
Just think of the safety features in current model cars. Sensors and cameras give new perspectives to drivers and alert them in an effort to avoid accidents. But that doesn’t prevent them completely. According to Liberty Mutual, repairing the bumper of an entry level luxury car in 2014 cost about $1,845. In 2016, that cost jumped to $3,550.
For credit unions, the impact of these rates could provide a tremendous opportunity. That’s because as rates rise, consumers are shopping around more at renewal time. What was once a one-time decision tied to a purchase or loan event is now an annual opportunity to create a connection. In fact, 66 percent of consumers are shopping because of increasing prices, while only 19 percent are shopping because they bought a new car, according to ComScore’s 2015 U.S. Auto Shopping Report.
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