⚡ Market Pulse: Auto insurance premiums are up—and so are dealer workarounds

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Welcome to the CDG Market Pulse—your no-fluff cheatsheet to auto retail, built to help dealers price right, stock smart, and stay ahead.

(Sourced from CDG’s Joe Cecala’s analysis of Insurify data)

⚡ Insurance premiums are climbing, especially for tech-heavy brands like Tesla.

And we’re not talking a few hundred bucks here…

The average U.S. auto premium hit $2K/year in April—a number that’s been climbing steadily since 2021.

Even the Subaru Outback and Honda CR-V (two of the most affordable models to insure) now hover near $1,900–$2K/year, despite averaging under $1,500/year from 2021 to today.

At the other end: Tesla’s Model X and 3 now run about $4K/year to insure, with the X up 125% YoY—likely from high repair costs, tech complexity, and claim frequency dragging premiums way up.

⚡ Insurance premiums top $3.5K/year in the hardest-hit states.

In Florida, New York, and Louisiana, the average premium now tops $3,500/year—which is nearly $300/month tacked onto every finance or lease deal, according to BankRate.

This means that rates are high, and they’re uneven. And in high-premium states, the same deal structure that works in North Dakota ($1,798/year) or Iowa ($1,857/year) falls apart fast.

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⚡ Auto insurance eats up 2x as much income in parts of the South.

In Louisiana, buyers spend 6.8% of their annual income on car insurance—more than double the national average (3%), according to BankRate.

That’s a tough pill for first-time and lower-income buyers, especially across the South.

And for dealers, it’s a reminder that affordability isn’t one-size-fits-all.

Not every dealer sees insurance as a deal killer. And not every dealer wants to talk or market insurance costs upfront.

But most agree: rising insurance costs are adding friction. And ignoring it doesn’t make it go away.

Take Mike McVeigh, dealer at David Dodge Chrysler Jeep in Pennsylvania.

He shot it to us straight: “Having the client shop their insurance AFTER my deal is the best practice for me. I do not want a higher car insurance to cost me a deal, so I make my deal first.”

But that doesn’t mean his team shies away from transparency. It just means they’re strategic about their timing.

His approach? Educate buyers, connect them to trusted brokers after the deal, and stay out of the way of objections that don’t need to exist yet.

And then there’s Bill Vaughn, a Nissan GM in the Midwest, who believes dealers might be missing the bigger picture here.

Basically, fixed ops is taking the lead again, and variable has to find new ways to keep up.

He even said he’s recently considered using the extra office on his lot to bring a broker in-house…

The signal: Some dealers are folding insurance into the post-sale flow. Others are thinking about turning it into a revenue stream. But the top stores are reading the room and adjusting in real time.

The top operators aren’t waiting until F&I to bring up insurance.

They’re baking in transparency early: highlighting “low-insurance picks,” showing all-in payments around $600/month, adding rough premium ranges on high-risk models, and tagging budget-sensitive buyers in the CRM.

Don’t make insurance the centerpiece. But help buyers understand how it fits into the deal they’re already considering.

Thanks for reading everyone.

— CDG