Auto Insurance Shopping Booms, Reports TransUnion

U.S. shoppers, specifically in the West and Midwest, increased auto insurance shopping in the first quarter of 2024, a 6% increase compared to Q1, according to new research by TransUnion. The specific figures are proprietary.

The increase is in keeping with TransUnion's recent report, which notes that current high interest rates have left many consumers scrambling to afford major purchases. New-vehicle loan originations with Annual Percentage Rates (APRs) of 5.9% and lower increased to 39% in the first quarter of this year, reports TransUnion. Super prime led origination growth at 14.7%, TransUnion reports.

Still, TransUnion reports good news for dealers. Consumers are still eager to purchase new and used vehicles. Their data shows about 23% of consumers have indicated plans to purchase or lease a vehicle to replace an existing one within the next 12 months, an increase from the 17% who said so in 2023.

“As insurers see improved profitability, it’s likely that some will cautiously increase investments in customer acquisition,” says Stothard Deal, vice president of strategic planning for TransUnion’s insurance business. “It will be paramount that they maximize those investments by identifying the best audiences, based on their likelihood to purchase as well as their overall risk levels.”

Rising costs of living are thought to be the reason those living in the West and Midwest were the most active insurance shoppers.

The Midwest, historically having the lowest average premiums, experienced the most significant rate increase in the past two years. In addition, lower income levels and inflation have consumers in this region looking for ways to save money, reports TransUnion.

Although West residents have significantly higher costs of living than Midwest residents, TransUnion cites inflation and a rise in insurance premiums as two factors driving increased shopping, presumably for lower insurance rates.