As inflation continues to rise, the cost of living has skyrocketed, making everything significantly more expensive than it was just a few years ago. This includes the increasing unaffordability of new vehicles. However, car buyers are also discovering the burden of hefty insurance premiums in today’s market, leading some to proactively explore different auto insurance options prior to buying a vehicle. It seems that this specific activity is not limited to those interested in purchasing a vehicle.
TransUnion’s latest quarterly Insurance Personal Lines Trends and Perspectives Report reveals an encouraging trend in the U.S. auto insurance market. In Q1 2024, there was a significant six percent increase in the number of consumers shopping for auto insurance compared to Q1 2023. This surge marks a five-year high and continues the positive trajectory that started in Q4 2023.
Based on this report, it appears that the western and midwestern regions of the U.S. have shown the highest level of activity. These areas have experienced a significant rate increase over the past two years, driven by factors such as lower income levels and inflation. As a result, consumers in these regions are actively seeking ways to save money. Nevertheless, the increasing cost of living nationwide is the primary driver of this pattern. TransUnion also highlighted that 23 percent of surveyed consumers intend to buy or lease a new vehicle within the next year to replace their current one, marking a rise from 17 percent in 2023.
Insurers may consider cautiously increasing investments in customer acquisition as they witness improved profitability. According to Stothard Deal, Vice President of Strategy Planning for TransUnion’s insurance business, it is crucial to optimize investments by targeting the most promising audiences in terms of purchasing potential and risk levels.
Stay tuned for upcoming updates on auto insurance rates. Make sure to subscribe to Ford Authority for the latest Ford news coverage.