United States tariff policy continues to evolve, altering projections for how the import duties will affect car prices and insurance rates.

Insurify expects that new rules limiting how tariffs apply to cars and car parts will result in drivers paying less than they would’ve paid under the administration’s previous, stricter tariff policies but still more than they would have paid if the government didn’t impose tariffs.1

Insurify data scientists project that insurance costs for the average vehicle could rise 9% by the end of the year, up from 5% before tariffs. The increase would bring the projected annual cost to $2,527 by the end of 2025.

Meanwhile, the sales price of the average new car could rise about 15% because of tariffs, according to an Insurify analysis of the 100 bestselling new cars of 2025. Insurify projects these new models could see annual insurance costs rise an additional 6% on average due to tariffs.

“Insurers are bracing for more expensive claims as tariffs raise costs for auto parts,” said Mallory Mooney, director of sales and service at Insurify. “Tariffs could increase car insurance costs for all models, with new models facing larger increases, as more expensive cars are generally more costly to insure.”

Tariffs raise costs for parts and models assembled internationally. Only about 48% of new popular models are assembled solely in the U.S., followed by Mexico (19%) and South Korea (12%), according to National Highway Traffic Safety Administration data.

To better estimate how tariffs could impact new car models, Insurify data scientists estimated tariff-driven increases in purchase prices and insurance costs for 100 popular vehicles.

Key findings

The typical new car sales price could increase about 15% due to tariffs, and insurance costs could rise 6%, based on each vehicle’s share of domestic content and assembly location.Among carmakers with multiple new models, new Buicks and Hyundais would see the highest average tariff-related increase in sales price, at 22%, followed by Kias at 21%. Tesla (5%) and Jeep (6%) would see the lowest average increase in sales price.Of the three most popular new car models in the U.S., the Toyota RAV4 would see the highest projected cost increase due to tariffs, at 25%, followed by the Chevrolet Silverado (12%) and Ford F-Series (11%).For the average vehicle on the road, car insurance costs may increase by 9% by the end of the year, raising the average annual cost to $2,527. Before tariffs, costs were expected to rise 5%.

How much tariffs could raise new car prices, by automaker

Insurify analyzed the 100 most popular new car models, including 16 carmakers who have multiple models in the top 100.

Based on each new model’s assembly location and the estimated share of foreign content within the vehicle, the brands expected to see the largest tariff-related increases in purchase price are Buick, Hyundai, and Kia. Despite being an American company, Buick assembles three of its four new models outside the U.S., subjecting them to 25% tariffs.

Jeep (6%) and Tesla (5%) models could average the lowest tariff-related price increases. Tesla’s most popular new models, the Model X and Model 3, are assembled in the U.S. with at least 60% domestic content.

In addition to higher sales prices, tariffs will also raise the average insurance cost for new models. The five makers facing the highest projected average increases across new bestselling vehicles are Buick, Hyundai, Kia, BMW, and Mazda. The two new Tesla editions included in Insurify’s projections, Model X and Model 3, are made mostly of U.S. content, mitigating tariff effects.

On a model-by-model basis, as many as 23 cars could see insurance rates climb by an additional 9 percentage points. The most popular of these are the Toyota RAV4, Chevrolet Trax, Subaru Forester, Mazda CX-5, and Hyundai Elantra.

Toyota RAV4 and Subaru Forester are among the new models that tariffs will impact the most

Insurify projects the typical new model will see a 15% price increase due to tariffs. But many models assembled outside the U.S. could see tariff-related purchase price increases of up to 25%.

That includes the Toyota RAV4, the third-bestselling new model in the U.S., which is assembled in Japan and has no domestic content, according to NHTSA data.

Among other popular models facing the highest 25% tariff are the Subaru Forester and Mazda CX-5, both of which are also assembled in Japan.

Overall, 23 of the most popular new models face the highest tariff-related purchase price increase of 25%, according to Insurify estimates.

The four new models tied for the lowest expected tariff-related price increase of 3% are the Honda Ridgeline, Dodge Durango, Tesla Model 3, and Jeep Gladiator.

Of the 100 bestselling new models, 22 could face both a 25% increase in sales prices and a 9% increase in annual insurance costs. That includes seven of the top 50 bestselling new models of 2025: the Toyota RAV4, Chevrolet Trax, Subaru Forester, Mazda CX-5, Hyundai Elantra, Chevrolet Trailblazer, and Hyundai Palisade.

Tariffs could increase average car insurance costs 80% faster by the end of 2025

Tariffs make car insurance more expensive because they make car parts, which are often imported, more expensive. Insurify’s projections for how tariffs will change pricing for car insurance have evolved over the past few months as the administration has added, exempted, and revised tariffs that would impact pricing for car parts.

Before the U.S. announced tariffs, Insurify projected inflation and insurer losses would push the average cost of car insurance 5% higher by the end of the year. By April, that projected increase rose to 19%, following multiple sets of tariffs that would affect auto parts pricing.

Since then, tariff policy has softened, with the government appearing to clarify that tariffs would not “stack” — meaning auto parts that could’ve been tariffed multiple times would instead only face the highest applicable individual tariff.2

Following the latest adjustments to tariff policy, Insurify projects the average cost of car insurance could rise 9% by the end of the year. That figure is an estimate based on the share of domestic vs. foreign content in the average vehicle, as well as factoring in approximate exemptions for parts compliant with the United States-Mexico-Canada Agreement (USMCA).

The average driver in Maryland, which already has the highest average insurance cost in the U.S., could pay an added $162 due to tariffs. Before the U.S. imposed new tariffs, Insurify projected that four states would see costs remain flat or decrease. With tariffs, each state would see a year-over-year price increase, ranging from about 2% to 14% on average.

State by state: The most common car brands on the road

Residents in some states rely more on automakers that are relatively exposed to tariff-related cost increases. Chevrolet is the most popular automaker in 28 states, and Insurify projects that its new models could average a 15% increase in sales price and up to a 7% increase in annual insurance costs. Of 11 popular new Chevrolet models, 10 source a majority of their content from outside the U.S.

Although Honda is a Japanese company, its newer models stand to face lower tariff-related increases. Seven of nine popular new Honda models are made mostly from U.S. content.

What drivers should know about tariffs

It will take time for tariff-related costs to show up in the typical driver’s car insurance rates. At the earliest, drivers might notice these costs around the end of 2025. Before insurers can raise rates due to tariffs, they generally have to submit requests to state regulators, explaining how they’re spending more money on claims due to more expensive costs for parts.

Consumers still have options for saving money on car insurance. Drivers can compare quotes from a variety of insurance companies to find the best available deal. They can raise their deductible to secure lower premiums, or they can make use of telematics devices or programs that track driver behavior.

Ultimately, the most important factor in keeping one’s auto insurance rates affordable is a safe personal driving history.

Methodology

To see how tariffs could impact new vehicle prices and insurance, Insurify data scientists looked at the 100 bestselling models in quarter 1 of 2025 for which American Automobile Labeling Act (AALA) data is available. Specifically, they analyzed the share of each vehicle’s content made outside the United States and each vehicle’s country of final assembly. Where applicable, the data represent an average across a model’s different trims.

Vehicle price increase projections reflect a flat 25% tariff on all vehicles imported from countries outside the United States, Mexico, and Canada. For models assembled in these three countries, the projections represent a 25% tariff on a model’s non-U.S. content and up to a 15% tariff discount of the total MSRP, as the White House has announced will be in effect for the next year.1

For models that are not new, insurance projections in this report factor in two main tariff costs, including the 25% automobile and auto parts tariffs and 25% tariffs on an estimated share of car parts from Canada and Mexico that are not USMCA-compliant. Insurify’s data scientists then calculated how these tariffs would affect car insurance rates by factoring in the proportion of average vehicle content that is foreign.

From there, Insurify analyzed the share of typical vehicle repair costs represented by parts and the proportion of a standard full-coverage car insurance policy that covers damages to one’s own or another’s vehicle. Insurify calculated tariffs’ effects on auto insurance prices on a national level and then equally distributed across states.

To calculate baseline prices, Insurify’s data scientists examined more than 97 million rates in the company’s proprietary database, quoted via integrations with over 120 insurance partners. Driver applications originate from all 50 states and Washington, D.C., and include information on the exact coverage specifications of each driver’s quoted policies. Insurify excluded Alaska data due to lower quoting volume.

The premiums in this report reflect the median insurance cost for drivers between the ages of 20 and 70 with clean driving records and average or better credit, unless otherwise noted. Yearly prices in this report are two-year rolling medians to manage extreme market volatility over the past few years.

For media inquiries or questions about our study, please contact the author here.

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