Trump’s Canada-Mexico 25% tariffs are now raising prices for car parts. Will your auto insurance increase, too?

Tariffs on your transportation

Increasing insurance costs may not be the only headache, as demand for cars produced domestically will see automakers expand their workforces, and add to the final cost of the vehicles they make.

They’ll also have to absorb the higher cost of steel and aluminum imports, which will likely be reflected in car prices, too.

Whether you’re buying a new car or repairing a used one, the cost of parts will make transportation more expensive for Americans. Demand for cars made domestically may also increase if imports become prohibitively expensive.

USA today reports that according to Wolfe Research, tariffs could make the average cost of a new car rise by about $3,000.

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Rising costs for insurance

In February, the American Property Casualty Insurance Association reported that approximately six in 10 auto replacement parts used in U.S. repair shops are imports from Canada, Mexico or China. With higher costs for these auto parts leading to increased costs for insurers, premiums will rise accordingly.

According to a recent report from the Kelley Blue Book, the national average cost for car repairs is $838. With tariffs, this could put the cost for repairs well over $1,000.

In spite of these rising insurance costs, remember that repairing your vehicle is often cheaper than leasing a new one. You can also save money in the long run through proactive maintenance, and the upfront cost of a comprehensive plan can be worth it if you’re involved in a serious accident.

Speaking to USA Today, Insurify data journalist Matt Brannon projects that New York state will see the biggest increases in insurance rates this year, totalling $489 by the end of the year. Nearly a fifth, or $110 of that cost is directly attributed to tariffs, he reported.

The good news? Brannon said that car owners probably won’t see increases in their insurance bill until the end of the year. Most insurers, he noted, have to be approved by state regulators to increase the cost of premiums. This process can take months.

“We expect those price increases would show up when drivers renew their policies or switch to a new insurer, rather than in the middle of a six-month coverage period,” he said.

You can get ahead of these anticipated costs by setting aside more funds in your savings, and starting to do some research to find a more competitively-priced policy for your auto insurance, so that when you renew you won’t feel it in your wallet.