Auto Insurance Companies Are Out of Control and Wrecking the Car Market | Episode 973
About this episode
Auto insurance rates are skyrocketing, impacting car buyers across the U.S. The hosts discuss how rising vehicle prices lead to higher repair costs, forcing insurance companies to increase premiums. They analyze data from Consumer Reports on which carriers are raising rates the most and explore state-by-state insurance costs, revealing Maryland and D.C. as the most expensive. The conversation also touches on the implications for car affordability and the overall market, suggesting that many consumers may struggle to keep up with rising costs.
2025 Chevy Silverado
"[336.0s] What would be a reasonable discount to buy a loaner 2025 Chevy Silverado versus a zero-mile"
The Silverado is a big truck made by Chevrolet that can haul heavy loads and has new features in 2025. It’s popular for work and family use.
The Chevrolet Silverado is a full‑size pickup truck known for its durability and towing capacity. The 2025 model year includes updated styling, technology features, and improved fuel efficiency compared to earlier years.
Chevy
"[336.0s] What would be a reasonable discount to buy a loaner 2025 Chevy Silverado versus a zero-mile"
Chevy is a popular car brand that makes trucks and cars people use every day. It’s known for being reliable and affordable.
Chevy is the colloquial name for Chevrolet, a major American automotive brand known for producing trucks, SUVs, and cars that emphasize value and practicality.
loaner vehicle
"[336.0s] What would be a reasonable discount to buy a loaner 2025 Chevy Silverado versus a zero-mile"
A loaner vehicle is a free or discounted car that a dealership gives you while your own car is being fixed, so you can still get around.
A loaner vehicle is a temporary car or truck provided by a dealership while a customer’s own vehicle is being serviced or repaired. It allows the customer to maintain mobility without purchasing a new car.
total cost of ownership
"But if we were, then we would talk about the total cost of ownership for a vehicle when you're purchasing a vehicle."
Total cost of ownership is the full amount you’ll spend on a car, from buying it to keeping it running, like gas, repairs, insurance, and how much its value goes down.
Total cost of ownership (TCO) refers to the complete expense of owning and operating a vehicle over its lifetime, including purchase price, fuel, maintenance, insurance, taxes, depreciation, and any other related costs.
payment buyers
"[607.0s] buy cars are what is referred to in the industry as payment buyers."
These are people who mainly care about how much they will pay each month for a car, not the overall price or other costs.
‘Payment buyers’ refers to consumers who prioritize the size of their monthly car payment over other factors like total cost or vehicle features. They often choose a model that fits their budgeted payment rather than the best value.
monthly payment
"[613.0s] all they're concerned with is what their monthly payment is."
It’s the amount you pay every month when you buy a car on a loan or lease.
The monthly payment is the amount a buyer pays each month to finance or lease a vehicle. It’s calculated based on loan terms, interest rate, and vehicle price.
insurance costs
"[626.0s] forget to check what the insurance is going to be on whatever new car they're looking at."
This is the money you pay to an insurance company to protect yourself and your car from accidents or theft.
Insurance costs are the premiums paid to cover potential damages or liabilities related to owning and operating a vehicle. They vary by coverage level, driver profile, and location.
overall cost of ownership
"[636.0s] insurance costs are part of the overall cost of ownership."
It’s the total amount you’ll spend on a car, not just the price tag—think of it as all the money that goes into keeping the car running.
Overall cost of ownership (OCO) includes all expenses associated with owning a vehicle over its lifetime: purchase price, financing, insurance, fuel, maintenance, and depreciation.
10 percent rule
"[641.0s] 10 percent rule as to how much you can afford to spend for a car"
It means you should try not to spend more than 10% of what you earn each month on car costs.
The 10 percent rule suggests that a buyer should spend no more than ten percent of their monthly income on car expenses (payment, insurance, maintenance). It’s a budgeting guideline to avoid financial strain.
Hyundai
"Let's do a Hyundai of some kind."
Hyundai makes cars that are usually cheaper and dependable, like the Elantra or Sonata.
Hyundai is a South Korean automotive manufacturer known for producing affordable, reliable vehicles such as the Elantra and Sonata.
2026 Hyundai Santa Fe calligraphy
"[790.0s] 2026 Hyundai Santa Fe calligraphy, $51,710 MSRP."
The 2026 Hyundai Santa Fe Calligraphy is a fancy, top‑level version of the Santa Fe SUV. It has extra luxury features and a stronger engine compared to lower trims.
The 2026 Hyundai Santa Fe Calligraphy is a high‑trim version of the mid‑size SUV, featuring premium interior materials, advanced tech packages, and a more powerful engine option. It represents Hyundai’s top‑tier offering for the Santa Fe line.
Mazda
"I guess I feel somewhat fortunate that I pay $490 a month all in on my lease on my Mazda, including insurance."
Mazda makes cars that are fun to drive and look good, like the popular Mazda3.
Mazda is a Japanese automaker famous for its stylish designs and engaging driving dynamics, especially in models like the Mazda3 and MX-5 Miata.
lease
"Here's the thing that you have to realize. When you lease a vehicle, you need higher limits of liability because the lender insists upon it, since they're the ones buying the vehicle on your behalf."
When you lease a car, you pay a monthly fee to use it for a few years and then give it back or buy it later.
Leasing a vehicle means you pay monthly to use the car for a set period, after which you return it or buy it at a predetermined price.
higher limits of liability
"When you lease a vehicle, you need higher limits of liability because the lender insists upon it, since they're the ones buying the vehicle on your behalf."
Leased cars need more insurance coverage so the company that owns the car is protected if something bad happens.
Insurance policies for leased cars often require higher liability limits to protect the lender's financial interest in case of an accident.
uninsured motorists
"[1363.0s] You know, I think the number of uninsured motorists in many areas will go up dramatically [1371.0s] because people just can't afford to pay for these more expensive insurance rates."
Uninsured motorists are people who drive without car insurance. If they cause an accident, the other driver’s insurance has to pay for damages, which can make insurance more expensive for everyone else.
Uninsured motorists are drivers who do not carry liability insurance, meaning they cannot cover damages or injuries caused in an accident. Their lack of coverage can lead to higher insurance premiums for insured drivers as insurers spread the risk across a larger pool.
affordability issues for a lot of people
"[1414.0s] because they can't afford it. [1424.0s] You know, would it be better if the average cost of a car was considerably less than it is today?"
When cars and insurance are expensive, fewer people can afford to buy or keep a vehicle. This makes the whole car market harder for everyone.
The discussion highlights how high vehicle prices and insurance costs can make owning a car difficult for many consumers, affecting overall market demand.
seasonably adjusted sales rate
"[1535.0s] And I can't wait to see what that translates into as far as the seasonably adjusted sales rate."
Seasonally adjusted sales rate means the numbers have been tweaked to ignore regular ups and downs that happen every year, like more cars sold during holidays. It helps people see the real trend in sales without those predictable bumps.
Seasonally adjusted sales rate is a statistical measure that removes predictable seasonal patterns—such as holiday spikes or winter slowdowns—from raw sales data. This allows analysts to compare year‑to‑year performance on a like‑for‑like basis, revealing underlying trends without seasonal noise.
Honda
"Honda doesn't want that there."
Honda makes cars that are known for being reliable and fuel-efficient, such as the Civic or Accord.
Honda is a Japanese automaker famous for its efficient engines and long-lasting vehicles, including the Civic and Accord.
Hyundai-Kia
"[1662.0s] You then have Hyundai-Kia dead flat. [1664.0s] Yes."
Hyundai-Kia makes cars that are usually cheaper and have good technology, like safety cameras and efficient engines.
Hyundai-Kia refers to the South Korean automotive joint venture that produces vehicles under both Hyundai and Kia brands, known for affordable cars with modern features.
CX-90
"We saw them do that earlier this year with the CX-90 when it wasn't selling."
The CX‑90 is a big SUV from Mazda that can seat up to eight people and comes with different engine choices, some of which use a small electric motor to help the gas engine.
The Mazda CX‑90 is a large crossover SUV that debuted in 2023, featuring three rows of seating and a range of powertrains including gasoline and mild‑hybrid options.
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