What do tariffs have to do with auto insurance and collision repair?

TUCSON, Ariz. (13 News) – Big tariffs on foreign made auto parts are now in effect.

That has some people reassessing their plans to buy a foreign car, or reevaluating if they want a new car at all.

But deciding not to buy a new car won’t fully insulate drivers from price changes, either.

New tariffs on auto parts could eventually make your car insurance more expensive.

If insurers have to pay more for repairs, insurance experts say they’re going to charge customers more in premiums.

13 News talked with a local repair shop to get their take on tariffs.

“This is where all the magic occurs. This is the disassembly and assembly of vehicles that have been in an accident,” said Javier Avalos. He is the owner of Spectrum Ina Road Auto Collision.

Depending on the vendor, Avalos says prices are set daily, quarterly, or annually – which adds to the uncertainty over how tariffs will impact his business.

“Right now, they are concerned. They’re saying is the estimate you gave me, how long is this good for? And we tell them; our estimates are good for 30 days,” said Avalos.

“We have used parts, we have original parts, and aftermarket parts. The used parts on a daily basis are going to change, that’s going to be supply and demand. So, if the demand is there for a certain part, guess what? The price is going to go up. For the OE, which is the factory original equipment, GM, Ford, Hyundai, their prices are set every quarter. So, every quarter they will make an adjustment. A headlight being $1,800 might drop to $1,300 or might go up to $2,200.”

When repairing cars gets more expensive, so does something else: auto insurance.

Shannon Martin with Bankrate says it’s not a matter of if, but when.

“Regardless of if you have a brand new car with comprehensive and collision, or you have an older car that’s liability only. These tariffs can still impact you. So, you have a coverage called property damage, that’s there to payout in case you hit their property. And comprehensive and collision pays to replace your vehicle. As parts get more expensive, even if you have a liability only policy, you might see the tariffs reflected in your premium,” said Martin.

Drivers shouldn’t expect to see their premiums go up overnight. Martin says insurance rates, as a rule, can’t change as quickly as other prices do.

According to Bankrate, people in Arizona spend more than $2,700 a year on car insurance. That’s about 3.5% of their income. It’s $100 more than the national average.

Back at Spectrum, Avalos expects minimal disruptions until the fourth quarter of the year, if anything.

He’s watching it closely, along with his vendors.

“If we do get to see a 20 to 35 percent increase on tariffs that may turn your car into a total loss. The insurance company will say now you’re charging me x-amount; we’re going to total the car. The consumer loses,” said Avalos.

In these unpredictable times, Avalos says it’s important to find a trusted mechanic. He recommends going to a local shop, and always get a written, signed estimate before any work is done.

The Arizona Attorney General’s Office says any estimate should include the problem that needs repair, the parts needed, and the anticipated labor charge.

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