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Skyrocketing auto insurance premiums are fuelling inflationary pressures in the USA. Costs have been rising at their fastest ever rates. Premiums jumped 2.6 per cent in March alone, which means costs are a whopping 22.2 per cent higher than this time last year. The increases contributed to inflation rising by 0.4 per cent last month. No other category of spending has soared as much as auto insurance. Foxbusiness.com said the average cost of car insurance in the US has surpassed $2,300 per year, which amounts to about $192 a month. The rising prices are impacting the lowest paid most. Insurance is becoming more of a financial burden for those struggling to make ends meet in the cost of living crisis.
Automotive analyst Sean Tucker tried to explain what is behind the rising prices. He said: "I think the biggest factor is a combination of new cars and [them being] more expensive, so if you [wreck] your car, the replacement cost is really high, and a fender bender is very expensive right now." He attributed the sophistication of technology, gadgetry and safety equipment in modern cars to more expensive repair and replacement costs. The cost of replacing the battery in an electric car can range from $6,500 to well over $20,000. A simple fender bender is likely to damage costly embedded sensors, cameras and sonar. One factor driving up labour costs is a shortage of car mechanics.
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