Car insurance rates will drop in NC this year, report says. Here’s why relief may not last

A new report says only drivers in North Carolina will get relief from higher auto insurance rates this year — but it may not last long.

North Carolina drivers will see their auto insurance rates decrease by 0.1% in 2025, making it the only state to experience a drop in rates this year, according to Lending Tree’s State of Auto Insurance 2025 report.

But the report also says rates could spike in 2026. Here’s why.

Why could auto insurance rates go up in NC?

Auto insurance rates could go up due to tariffs imposed on other countries that the U.S. imports car parts from, such as China and Mexico.

The U.S. imports 60% of its replacement car parts, according to Lending Tree.

“Higher parts costs mean higher repair prices and more expensive claims, which will result in more, and a bigger rate hike,” the company said.

Though tariffs on Mexico are currently on hold, they could lead to higher automobile prices, since the country has emerged as a leading vehicle manufacturer, Robert Handfield, a distinguished professor of supply chain management at North Carolina State University, previously told The Charlotte Observer.

“There’s a very tight integration between the United States, Canada and Mexico for automotive,” Handfield said. “Automotive parts go back and forth between all three borders because they’re very tightly integrated, so tariffs would really cause the automotive manufactured parts to go up, particularly for smaller cars — a lot of those are produced in Mexico.”

How much does a traffic violation increase insurance costs?

Drivers in North Carolina are likely to see the highest cost increase after a road incident, with a typical increase of 146%,according to Lending Tree.

Driving under the influence can be especially costly for North Carolina drivers, with an average cost of $591 per month after the first offense, Lending Tree says. Tickets and crashes could result in a monthly increase of $192 and $244, respectively, in auto insurance premiums.

According to North Carolina’s Safe Driver Incentive Plan, drivers can see their rates jump by as little as 40% for a moving violation to as much as 340% for driving while impaired or a hit-and-runs resulting in bodily injury or death.

How to save money on car insurance

Here are some ways you can save money on car insurance, according to NerdWallet:

Shop around: It’s important to compare rates since insurers weigh factors like age, driving history and location differently.

Take advantage of discounts: Make sure to check your insurer’s discount page often to see if you’re getting the best deals.

Drive safely: Try to limit the number of speeding tickets and traffic violations you get that can drive up insurance premiums.

Drop insurance you don’t need: If your car is older, you may be able to drop collision and comprehensive insurance.

Drive a car that’s cheap to insure: Moderately priced vehicles are cheaper to insure than expensive cars.

Increase your deductible: You can save money on collision and comprehensive insurance by raising the deductible, the amount the insurance company doesn’t cover when paying for repairs.

Improve your credit: Making loan and credit card payments on time, keeping credit card balances low and limiting the number of credit cards you have can improve your chances of getting a better rate.

Consider usage-based insurance: If you don’t drive a lot, you can use usage-based or pay-per-mile insurance plans to lower your rates.

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