Why Car Insurance Keeps Getting More Expensive
The cost of auto insurance in the US rose more than 22 percent in the 12 months that ended in March, the biggest annual jump since 1976. Rates are up 43.7 percent since January 2020, making car insurance premiums one of the bigger contributors to high inflation. Here’s why: 1. Cars are more expensive to fix. According to Bloomberg, today’s cars are packed with high-tech gadgetry meant to entertain, comfort, and protect occupants. The array of safety equipment now common on cars includes automatic emergency braking, blind-spot detection, and lane departure warnings. To give drivers eyes in the back of their head, automotive engineers have embedded cameras, sonar, and radar sensors from bumper to bumper. All that technology has driven up the cost of repairing even a minor fender bender. For example, when Toyota Motor Corp. upgraded its Camry sedan in 2018, its front bumper went from having 18 parts to 43, including sensors for the advanced driver-assistance system that can control speed and lane position automatically as well as provide blind-spot warnings. As a result, it now costs 43 percent more to repair a Camry after a front-end collision. Click here for the full story.
New-Car Inventory and Price Changes Approach Normal in 2023, NADA Report Shows
New-vehicle inventory grew, and prices rose in 2023, but not as dramatically as the year before, according to a new report from NADA. The average retail selling price for a new vehicle increased 1.6 percent to $47,014 in 2023, marking slower growth than the 9.2 percent increase in 2022, according to the NADA 2023 Annual Financial Profile of America's Franchised New-Car Dealerships. And new-vehicle inventory grew 38 percent to 2.3 million at the end of 2023, but the progress was a smaller change than 2022's roughly 50 percent increase, reports Automotive News. The NADA Data financial profile of U.S. franchised dealerships is published twice a year. There were 16,835 dealerships at the end of 2023, according to the report. "We started to see signs of the market normalizing in the back half of last year, and I think that is going to be the story for 2024," said NADA Chief Economist Patrick Manzi. "We are going to see more normal seasonal sales patterns of vehicles." The average number of new vehicles sold per dealership grew in 2023, up 12 percent to 918. The uptick represents a reversal of the 8.5 percent decrease in 2022. Click here for the full story.
Average New Car Prices Dip in March, But Affordability Remains Distant
New car prices dipped again in March amidst a resurgence in inventory and manufacturer incentives. Kelley Blue Book data indicates the average new car transaction price dipped 1 percent on a monthly and yearly basis in March, falling to $47,218. Surprisingly, while other segments saw marginal declines in value, electric vehicle prices experienced a slight boost, gaining 0.6 percent to hit $54,021, reports CBT News. However, new EVs are still far cheaper now than a year ago. Two factors contributed heavily to the overall decline in new car prices. Inventory levels are far ahead of prior-year levels, thanks to the rapid recovery of global manufacturing following the COVID-19 pandemic. Cox Automotive reports the year-over-year increase in new vehicle supply reached 52 percent in March, helping automakers meet demand more effectively. Incentives also served to drag new car prices lower. Automakers have sought to further capitalize on the advantages higher inventory levels have introduced by reintroducing manufacturer discounts. Last month, incentives accounted for 6.6 percent of the average new vehicle transaction price, slightly higher than February’s 5.9 percent and more than double last year’s share of 3.2 percent. Click here for the full story.
New IRS E-Filing Rule for Cash Transactions in Effect for Dealers
The 2024 tax season is ending, but one of its new rules may continue to be felt by dealerships throughout the year. Dealerships that filed 10 or more of certain tax forms — such as employee W-2s and 1099s — had to do so electronically in 2024 for the 2023 tax year. Meeting that threshold also triggered a requirement to go digital this year with Form 8300, which retailers use to report large cash purchases. According to Automotive News, the IRS last year lowered the threshold for mandatory e-filing for businesses from 250 information returns to 10. It also removed the exemption for corporations with fewer than $10 million in assets. The requirements took effect Jan. 1, 2024. In August, the IRS announced the electronic filing requirement also would now apply to Form 8300. Dealerships and other businesses are required to file the form when they receive a cash payment of more than $10,000. Form 8300s must be filed within 15 days from the date of the transaction. The requirement also took effect Jan. 1. Reaching the e-filing threshold for information returns such as W-2s means all Form 8300s filed during the calendar year must be done digitally. Click here for the full story.
Hyundai Ioniq 5 N First Drive Review: Mega Fun Everywhere, Not Just 0-60
For people who love to drive – beyond a straight-and-narrow stoplight blast – EVs present a conundrum. They’re swift, seamless and squeaky-clean. But they tend to be isolating, shy on character and driver engagement. Early exceptions to the rule, your Porsche Taycans or Lucid Airs, are beyond the reach of many buyers. According to Autoblog, the 2025 Hyundai Ioniq 5 N seeks to change all that, heightening sensation, sound, rally-car moves and even DIY gear changes. History’s most powerful Hyundai is 641 horses worth of newfangled tech that aims to feel old and familiar. And it mostly succeeds, as I discovered while chasing 11-time Pikes Peak Hill Climb winner Paul Dallenbach around Laguna Seca. To burnish the racing bona fides, Dallenbach will drive a showroom-spec Ioniq 5 N up Pikes Peak’s 156 turns in hopes of setting a record time for production electric SUVs, a feat the team believes is well within reach. Dallenbach’s quiet confidence bodes well for the N division’s first EV, a lavishly upgraded Ioniq 5 that starts from $67,475 in near-loaded guise. Click here for the full story.
CNA National Tops $28 Million in Dealer Distributions for 2023
CNA National Warranty Corporation (CNAN) returned more than $28 million to automobile dealers across the U.S. through its participation programs for 2023 making the organization’s inception-to-date total more than $712 million. “Whether it’s our participation programs, claims handling or service contracts, our goal is to reliably deliver value through personalized solutions,” said Joe Becker, president and CEO of CNAN. “Our in-house expertise and depth of external resources give us the ability to consistently help dealers generate more income.” CNAN professionals work closely with dealers to understand their needs and guide them to the participation structure that best meets their financial goals. The reinsurance team is comprised of experts in the field who help dealers think through the tough questions, explain all the details of the programs and serve as a resource throughout the sign-up process and beyond. “Our dedicated dealer management team evaluates claims, product mix and other factors to help dealers maximize their profits,” said Casey Lytle, associate vice president of reinsurance and sales programs. “We offer support and service that is a step above the competition.” To learn how CNA National can help you maximize your income potential and long-term success, call (800) 345-0191 x450 or send a request to CNAN.
Around the Web
Maserati Will Only Sell EVs by 2028 [The Drive]
Aston Martin Plans to Sell Gas-Engined Cars Well into the 2030s [Car and Driver]
Mercedes-Benz 'Graphical Goodies' Features Masters Imagery on Dashboard [Automotive News]
