The “Cash for Clunkers” program may be over but the great deals consumers thought they received may be offset somewhat by higher insurance premiums on their new vehicles.
“When they buy that new vehicle, the insurance generally will cost more,” Hartwig said in an interview. “It’s a newer vehicle and people will normally take out full coverage of the car. Any auto insurer would stand to gain.”
A rebound in auto sales amid the clunkers program may bring relief to auto insurers facing pressure from rising medical costs, reduced consumer purchases and declines in the value of fixed-income holdings. Progressive last month reported its first quarterly gain in net income since 2006, and Geico’s profit fell 63 percent in the second quarter on an increase in claims.
Just another hidden cost to thsi government program.