Higher Repair Costs and Increased Totals Expected
One of the immediate impacts for consumers will be significantly higher repair costs. Currently, approximately 60% of replacement auto parts used in repairs across U.S. shops are imported, primarily from Mexico, Canada, and China, according to the American Property Casualty Insurance Association (APCIA).
Higher costs for imported parts mean insurers will have to shoulder increased expenses for repairs following vehicle collisions or damage, directly translating to elevated insurance rates. Collision insurance, comprehensive coverage, and liability insurance policies are all likely to experience these upward adjustments.
An additional unintended consequence of soaring repair expenses is the likelihood that more damaged vehicles will be classified as totaled by insurance companies. As the threshold for repairs becomes economically unfeasible, more insurers will choose to pay the actual cash value (ACV) of vehicles rather than finance increasingly expensive repairs. Consequently, more drivers will be forced to navigate the car market at a time when tariffs have already pushed new vehicle prices higher.
