Analysis in Brief
Impacts of rising costs and claims on personal automobile insurance profitability and consumers in Canada

Acknowledgements

The author would like to thank Alexandre Fortier-Labonté, whose insights and feedback greatly contributed to the development of this work.

Introduction

Canada’s property and casualty (P&C) insurers have faced many challenges in the past few years, impacted by the COVID-19 pandemic, a rise in thefts, and extreme weather. These effects were made worse by inflationary pressures, leading to profitability concerns for insurers and price increases for consumers. P&C insurance is mainly composed of property (homeowners’) and automobile (auto), personal and commercial insurance. This analysis focuses on auto insurance, specifically personal auto insurance, which is synonymous with private passenger vehicle insurance.

This study delves into the contributing claim and cost factors that have impacted the premiums consumers pay for auto insurance and the financial pressures insurers face. The engine type, brand name and location of vehicles have contributed, as well as the overall rising cost of repairs, parts and the vehicles themselves. Coverage types and provincial regulations have also impacted insurers and consumers alike, disproportionally affecting certain provinces. Claims severity^Note  , impacted by the aforementioned factors, as well as thefts and extreme weather, has also contributed to the fact that owning and insuring a vehicle have become costlier since 2020, made worse by the pandemic. 

This analysis uses data from the Quarterly Survey of Financial Statements (QSFS),^Note  among other sources. Financial statement^Note  information is used to explore several profitability metrics that are important within the P&C industry^Note  and compare them with the Consumer Price Index (CPI)^Note  for passenger vehicle insurance premiums^Note  and other vehicle-related costs.

Automobile insurance varies by province

In Canada, auto insurance is provincially regulated, and minimum levels of coverage are mandated by provinces. In British Columbia, Manitoba and Saskatchewan, consumers are required to purchase minimum coverage through the government insurer. In Quebec, consumers must purchase bodily injury coverage from the government insurer, while other coverages can be purchased elsewhere. In Alberta, Ontario and the Atlantic provinces, consumers purchase coverage from private insurers. In Manitoba and Saskatchewan, collision and comprehensive coverage is mandated, while in all other provinces, these types of coverages are considered optional.

Provincial bodies control premium rate changes, where approval is required prior to any private insurer, subsidiary or provincial carrier increasing or decreasing rates,^Note  regardless of whether it is a government or private insurer. These rate approvals change the rates used by auto insurers to calculate the premiums paid by consumers, meaning that a rate increase of 5% would result in premiums increasing 5%, on average, for that company within a given location. The province may also provide rate caps, rate freezes or rebates, thus regulating the private insurers and directly impacting provincial insurers that operate as not-for-profit organizations. Provincial regulators consider a company’s financial position, such as profit and expenses, as well as current market conditions, when determining approvals. Although rate increases are more common, rate decreases may also be administered for competitive reasons.

Auto insurers and consumers face varying coverage requirements and regulations

Auto insurance can be divided into several main components, including liability, direct compensation for property damage, accident benefits and loss or damage to an insured automobile.^Note  Liability coverage protects the owner from legal responsibilities. Direct compensation for property damage covers damage to the automobile or loss of use when another motorist is responsible. Accident benefits cover payments for death or bodily injury and recovery of damages if caused by an uninsured motorist. Loss or damage to an insured automobile covers collision and comprehensive insurance, which generally includes fire and theft. Individual policies may also list specified perils, such as hail damage or accidents during transport. Auto insurance does not typically compensate an owner for the contents of a vehicle, such as a missing wallet, laptop or any personal items that may be present in the vehicle during a collision, theft or other claim. Policies are often divided into sections based on each type of coverage, with specified premiums and limits,^Note  often with a corresponding deductible.^Note 

In some provinces, no-fault or partial no-fault insurance applies. In the event of an accident, the no-fault insurance applies to compensation for bodily injury. Under a no-fault system, drivers deal directly with their respective insurers, minimizing the need to sue for pain and suffering damages. Ideally, this provides quicker claim settlements, as opposed to drawn-out legal cases. The exact terms vary by province. Ontario, Quebec and the four Atlantic provinces have a no-fault system, while the three provinces with provincial carriers have a variant of a no-fault system. Alberta operates under a partial no-fault system known as direct compensation for property damage.

Claims ratio moderate during pandemic, while combined ratio up on higher expenses, despite higher revenues and premiums

Higher claims have affected P&C insurers, with the auto segment being the largest line of business within the industry. This segment plays a significant role in a company’s financial performance, exceeding the contribution of the homeowners’ segment as measured by insurance revenue. For homeowners’ insurance, extreme weather brought on by climate change has impacted both insurers and consumers, worsened by pandemic-related delays and high replacement cost factors.^Note 

For auto insurance, the rise in claims has been influenced by many factors that often interact, further exacerbating the associated costs. The claims ratio^Note  (Chart 1) was moderately high during the first three quarters of 2020, but both insurers and consumers experienced some relief during the pandemic lockdowns and work-from-home trends from the third quarter of 2020 to the second quarter of 2022. The claims ratio has since increased, surpassing 81.2% in the first quarter of 2023 and remaining elevated into 2024, peaking at 90.4% in quarter three of 2024. The claims ratio is impacted by factors such as collisions, thefts, repair costs, vehicle prices and inflation.

Data table for Chart 1

Data table for chart 1
Table summary
This table displays the results of Data table for chart 1 Claims Ratio, calculated using percent units of measure (appearing as column headers).

	Claims Ratio
	percent
Source: Quarterly Survey of Financial Statements, author's calculations.
2020
Q1	77.7
Q2	75.9
Q3	74.4
Q4	57.6
2021
Q1	50.5
Q2	54.0
Q3	59.7
Q4	57.7
2022
Q1	56.1
Q2	57.3
Q3	69.3
Q4	67.8
2023
Q1	81.2
Q2	72.8
Q3	74.1
Q4	71.5
2024
Q1	72.9
Q2	67.1
Q3	90.4
Q4	71.4

From the onset of the pandemic to May 2020, roughly 3.4 million jobs were lost.^Note  Canada closed its borders and provincial restrictions were put in place, leading to fewer vehicles on the road. In some cases, consumers removed unnecessary coverage, opting to park their vehicles when road coverage was not required. In the third quarter of 2022, the claims ratio began trending upward. Insurers attributed higher claims costs to extreme weather events during this period, alongside standard factors. In 2024, theft was identified as an additional contributor.

The combined ratio^Note  (Chart 2) for total P&C insurers follows a similar trend as the claims ratio. Higher claims costs contributed to an increase in the combined ratio, which accounts for both claims costs and other expenses. A ratio above 100% means that insurers were not profitable during that quarter on underwriting (insurance) alone. The combined ratio peaked in 2020 because of higher expenses and has since hovered around 100% for several quarters. The net insurance service ratio (NISR)^Note  is a new key performance indicator within P&C insurance that is similar to the claim and combined ratios but yields moderately different results^Note  because net reinsurance costs are included and general and operating expenses are excluded. Numerous insurers over the last four years have encountered unprofitable quarters measured by the combined ratio and the NISR.

Data table for Chart 2

Data table for chart 2
Table summary
This table displays the results of Data table for chart 2 Combined ratio and Net insurance service ratio, calculated using percent units of measure (appearing as column headers).

	Combined ratio	Net insurance service ratio
	percent
Note .. not available for a specific reference period Source: Quarterly Survey of Financial Statements, MSA Research, author's calculations.
2020
Q1	104.8	.. not available for a specific reference period
Q2	108.8	.. not available for a specific reference period
Q3	82.7	.. not available for a specific reference period
Q4	107.4	.. not available for a specific reference period
2021
Q1	85.4	.. not available for a specific reference period
Q2	93.1	.. not available for a specific reference period
Q3	99.3	.. not available for a specific reference period
Q4	99.1	.. not available for a specific reference period
2022
Q1	93.4	.. not available for a specific reference period
Q2	94.5	.. not available for a specific reference period
Q3	100.6	.. not available for a specific reference period
Q4	94.8	.. not available for a specific reference period
2023
Q1	97.1	95.0
Q2	95.2	98.0
Q3	97.6	98.0
Q4	89.0	98.0
2024
Q1	92.4	103.0
Q2	87.8	97.0
Q3	97.6	95.2
Q4	92.6	95.2

Net insurance service ratio exceeds 95% in all quarters at Canada level, some provinces see losses

The NISR^Note  (Chart 3) surpassed 80% in nearly all quarters and provinces and exceeded 95% in several quarters. According to the industry, a NISR above 80% indicates potential unprofitability, given that this ratio is largely driven by claims and does not take all general business and operating expenses into account, leaving little room for profit once factored in.

Data table for Chart 3

Data table for chart 3
Table summary
This table displays the results of Data table for chart 3 Panel A - Atlantic, Panel B - Central , Panel C - Government Insurers, Panel D - Alberta, Newfoundland , Prince Edward, Nova Scotia, New Brunswick, Quebec, Ontario, Manitoba, Saskatchewan, British Columbia and Alberta, calculated using percent units of measure (appearing as column headers).

	Panel A - Atlantic				Panel B - Central		Panel C - Government Insurers			Panel D - Alberta
	Newfoundland	Prince Edward	Nova Scotia	New Brunswick	Quebec	Ontario	Manitoba	Saskatchewan	British Columbia	Alberta
	percent
Note .. not available for a specific reference period Note: Government insurers year end is March. Government carrier data may include commercial line of business. Source: Insurance Bureau of Canada, Saskatchewan General Insurance, Manitoba Provicial Insurance, MSA Research, author's calculations.
2023
Q1	82.7	75.2	93.3	101.4	104.5	96.0	.. not available for a specific reference period	.. not available for a specific reference period	123.7	89.6
Q2	94.2	81.7	91.3	104.6	97.1	99.9	.. not available for a specific reference period	.. not available for a specific reference period	106.7	95.8
Q3	94.7	102.6	98.2	101.0	95.9	98.9	.. not available for a specific reference period	.. not available for a specific reference period	112.9	97.7
Q4	94.2	103.0	94.2	99.8	93.8	97.4	.. not available for a specific reference period	.. not available for a specific reference period	106.5	98.5
2024
Q1	105.9	96.4	95.7	92.0	95.6	97.9	81.9	111.4	112.5	109.6
Q2	96.7	91.0	95.2	87.5	83.2	96.8	.. not available for a specific reference period	.. not available for a specific reference period	94.8	109.7
Q3	99.3	91.1	94.7	92.2	89.4	92.7	.. not available for a specific reference period	.. not available for a specific reference period	84.3	105.6
Q4	99.2	91.5	97.6	97.6	88.9	91.9	.. not available for a specific reference period	.. not available for a specific reference period	95.7	108.2

Return on equity high in 2021, reverting to historical norms by 2024

Return on equity (ROE) (Chart 4) peaked in 2021 at 18.2%, significantly higher than the historical average of 10.5%.^Note  Since 2022, ROE has trended downward, driven in part by higher claims, expenses and inflation. Given the competitive nature of the insurance industry and the need to justify price increases based on current economic conditions, the 2021 ROE is likely unsustainable. In general, an inverse relationship exists between the claims ratio and ROE. In 2023, ROE reached its lowest point (9.1%), when claims and expenses were the costliest. Despite rising revenue, higher expenses have put pressure on insurers’ profitability. Following an unfavourable year in 2023, ROE increased to 12.6% in 2024, as claims and expenses began to stabilize.

Data table for Chart 4

Data table for chart 4
Table summary
This table displays the results of Data table for chart 4 Return on equity, calculated using percent units of measure (appearing as column headers).

	Return on equity
	percent
Note: 2020 contains quarter two, three, and four. Source: Quarterly Survey of Financial Statements, author's calculations.
2020	16.1
2021	18.2
2022	12.6
2023	9.1
2024	12.6

Ontario contributes most to revenues and expenses and has the most vehicle registrations

Ontario contributed the most to overall expenses and revenues at the Canada level, mainly because the province had the most households and vehicle registrations (Chart 5).

Data table for Chart 5

Data table for chart 5
Table summary
The information is grouped by Province (appearing as row headers), Revenues, Expenses, Households and Vehicle registrations, calculated using dollars and units units of measure (appearing as column headers).

Province	Revenues	Expenses	Households	Vehicle registrations
	dollars		units
Source: Vehicle registrations, by type of vehicle and fuel type, MSA research, Insurance Corporation of British Columbia, Saskatchewan General Insurance, Manitoba Provicial Insurance.
British Columbia	5,598,501	5,715,126	2,211,694	3,615,356
Alberta	4,055,187	3,867,932	1,772,670	3,519,123
Saskatchewan	1,690,176	1,825,237	513,725	917,761
Manitoba	1,586,942	1,488,213	571,528	932,658
Ontario	13,015,186	12,579,433	5,929,250	9,429,566
Quebec	4,690,146	4,397,375	4,050,164	6,007,063
Atlantic	1,574,940	1,498,492	1,186,271	1,804,490

Over time, both revenues and expenses have trended higher for private passenger auto insurance. As of year-end 2023, at the Canada level, revenues and expenses were nearly on par. In British Columbia and Saskatchewan, expenses exceeded revenues (Chart 3); however, the government insurers dominating these provinces operate as not-for-profit organizations.^Note  Although averages should be used with caution, it can be estimated that Canadian households own around 1.5 vehicles in most provinces. Newfoundland and Labrador had the lowest average, with 1.4 cars per household, while Alberta ranked highest, at 2.0. Saskatchewan also exceeded the national average, with 1.8 vehicles per household. At the Canada level, 90% of households had at least one vehicle,^Note  and nearly all of these vehicles had internal combustion engines (ICEs) that use either gasoline or diesel.

New vehicle registrations trend upward from pandemic lows as the number of commuters and length of commutes increase

Canadians rely heavily on personal automobiles for travel and commuting. Road motor vehicle registrations, excluding buses and motorcycles, increased 1.66% in 2021 and 0.25% in 2022, reaching 25.4 million total registrations. In May 2023, 15.9 million people were commuting, up 3.3 million from 2021, when 82.6% were commuting using motor vehicles. This increase is partially attributable to the decrease in work from home and population growth. Results varied by province. Ontario, Alberta and Prince Edward Island experienced increases in commuting by motor vehicle, while other provinces were largely unchanged. The number of workers with commutes of at least 60 minutes also increased, up 51.7% from 2021 to 2023. Of all new motor vehicle registrations, the vast majority are ICEs. All else being equal, having more vehicles on the road contributes to the potential for a higher frequency of automobile claims.

Data table for Chart 6

Data table for chart 6
Table summary
This table displays the results of Data table for chart 6 Gasoline, Diesel and Electric, Hybrid, Other, calculated using number of registrations units of measure (appearing as column headers).

	Gasoline	Diesel	Electric, Hybrid, Other
	number of registrations
Source: New motor vehicle registrations, quarterly.
2017
Q1	403,087	14,283	11,161
Q2	581,151	17,643	17,249
Q3	521,730	18,150	17,633
Q4	423,659	15,711	17,475
2018
Q1	380,187	14,642	18,135
Q2	563,103	21,781	37,871
Q3	500,791	19,327	32,258
Q4	390,802	14,850	26,396
2019
Q1	373,971	13,223	23,204
Q2	527,118	16,058	52,033
Q3	487,211	16,810	42,772
Q4	388,271	12,998	32,941
2020
Q1	303,035	13,567	31,535
Q2	277,460	12,867	24,787
Q3	457,057	19,494	49,390
Q4	347,376	18,841	44,505
2021
Q1	326,146	18,112	48,853
Q2	416,441	20,057	74,100
Q3	384,338	14,411	71,833
Q4	288,203	13,296	57,081
2022
Q1	283,317	15,985	66,881
Q2	351,666	23,045	87,114
Q3	319,037	19,681	90,090
Q4	279,160	16,536	84,202
2023
Q1	285,416	16,567	84,879
Q2	367,126	19,765	134,369
Q3	343,082	18,102	153,565
Q4	320,820	19,586	140,387
2024
Q1	313,551	17,979	131,757
Q2	383,572	20,917	172,417
Q3	339,446	21,860	197,617

Historically, the seasonal trend in vehicle registrations (Chart 6) was more pronounced, with consumers registering vehicles most often in the second and third quarters. Because of the pandemic, registrations hit a low point in the second quarter of 2020, a decrease of approximately 50% from a typical second quarter. Total vehicle registrations are now higher than they were before the pandemic, but quarterly new vehicle registrations are lower. Electric vehicles, including battery electric, hybrid, plug-in and other vehicles, are being registered more often than in any years prior.

Vehicle sale price a consideration in higher claims costs

New motor vehicle sales (Chart 7), which are directly linked to registrations, trended upward from 2014 to 2019. The pandemic-related dip can be seen in both the number of new vehicles sold and the total sales revenue for 2020. If vehicle prices were to remain unchanged, an increase in units would, in turn, increase sales in dollars. Since the onset of the pandemic, the number of units sold has increased, but units per year have remained lower. The growing gap seen in Chart 7 between units and dollars indicates upward price pressure per unit sold.

Data table for Chart 7

Data table for chart 7
Table summary
This table displays the results of Data table for chart 7 New motor vehicle sales, calculated using units and dollars (in thousands) units of measure (appearing as column headers).

	New motor vehicle sales
	units	dollars (in thousands)
Source: Table 20-10-0001-01  New motor vehicle sales.
2014
January	97,624	3,461,575
February	107,501	3,779,018
March	160,655	5,682,849
April	182,239	6,278,892
May	199,568	6,884,962
June	179,556	6,266,851
July	180,682	6,277,118
August	174,757	6,021,329
September	172,069	6,094,943
October	159,144	5,681,354
November	141,763	5,074,899
December	134,829	5,009,469
2015
January	101,597	3,729,812
February	111,933	4,118,142
March	164,402	5,967,542
April	192,647	6,910,768
May	201,603	7,189,418
June	181,780	6,667,610
July	181,324	6,512,342
August	178,591	6,409,757
September	178,738	6,570,649
October	166,521	6,084,201
November	148,163	5,478,891
December	132,218	5,126,074
2016
January	110,686	4,295,419
February	121,933	4,728,596
March	178,227	6,745,037
April	203,557	7,570,371
May	198,425	7,379,863
June	193,818	7,258,509
July	175,846	6,654,406
August	174,976	6,691,685
September	177,191	6,942,118
October	157,414	6,121,957
November	163,320	6,467,708
December	128,352	5,268,834
2017
January	112,996	4,538,110
February	125,284	5,022,160
March	190,744	7,537,573
April	200,291	7,925,441
May	220,436	8,590,484
June	207,008	8,299,645
July	184,809	7,295,374
August	187,208	7,488,038
September	190,640	7,694,331
October	167,892	6,915,797
November	161,903	6,764,403
December	127,734	5,530,452
2018
January	120,246	5,006,244
February	128,399	5,354,688
March	190,863	8,040,083
April	195,838	8,249,951
May	220,858	9,281,703
June	206,988	8,634,033
July	179,754	7,365,887
August	185,349	7,394,498
September	181,516	7,628,266
October	166,566	7,097,044
November	150,143	6,766,437
December	119,201	5,400,236
2019
January	112,178	4,856,206
February	124,493	5,360,981
March	187,907	8,172,306
April	186,487	8,126,000
May	208,375	8,938,556
June	193,885	8,400,102
July	178,450	7,590,172
August	187,961	8,066,498
September	173,009	7,673,545
October	163,718	7,116,489
November	147,221	6,522,466
December	116,466	5,446,466
2020
January	113,350	5,064,648
February	127,529	5,683,474
March	98,019	4,574,108
April	47,508	2,305,372
May	116,102	5,194,076
June	163,864	7,362,400
July	167,600	7,419,854
August	172,647	7,610,737
September	178,057	7,923,905
October	160,024	7,117,901
November	133,733	6,152,460
December	113,686	5,486,010
2021
January	91,508	4,264,807
February	115,223	5,446,854
March	176,036	8,234,794
April	167,601	7,831,843
May	159,559	7,206,673
June	169,492	7,885,361
July	157,566	7,308,461
August	151,943	7,048,481
September	145,283	6,695,905
October	136,399	6,398,153
November	116,624	6,000,072
December	105,080	5,646,858
2022
January	96,511	4,823,630
February	105,859	5,233,359
March	146,975	7,279,073
April	142,910	6,986,937
May	149,951	7,657,555
June	152,604	8,098,162
July	134,643	6,914,791
August	136,815	7,381,156
September	140,094	7,369,580
October	131,085	6,853,944
November	125,339	6,663,305
December	110,271	6,135,048
2023
January	103,355	5,851,062
February	109,799	6,174,969
March	152,943	8,483,490
April	151,335	8,252,891
May	171,889	9,648,708
June	169,527	9,352,513
July	147,618	8,190,694
August	159,668	8,926,326
September	164,168	9,154,748
October	151,978	8,400,811
November	144,634	8,071,438
December	128,827	7,455,783
2024
January	116,874	6,417,326
February	136,622	7,450,359
March	171,641	9,223,052
April	175,066	9,722,960
May	184,711	10,414,824
June	166,120	9,430,648
July	169,327	9,518,546
August	166,001	9,241,475
September	166,557	9,569,718
October	164,757	9,294,949
November	161,535	9,385,630
December	135,511	8,084,277

As of December 2024, the median price per new vehicle was $65,219,^Note  up from $40,386 in 2019, at the Canada level,^Note  and for used vehicles, the price increased to $34,445, up from $18,900. New and used (Chart A.2) vehicle prices have come down moderately from highs experienced in 2023, but vehicles remain costlier than they were in years prior. From December 2019 to December 2024, the provinces experienced new vehicle price changes from a low of 45.1% in Alberta to a high of 85.5% in Quebec. Despite Quebec encountering the largest five-year increase, new vehicles are currently most expensive in Alberta, at $68,948, and least expensive in the Atlantic provinces, at $61,355.^Note  Vehicle prices in all provinces have declined from highs experienced in 2023. All else being equal, a higher-valued vehicle costs insurers more to repair or replace, in turn costing consumers more in insurance premiums.^Note 

Electric vehicles trend higher, contributing to higher claim costs because of costlier repairs

The shift toward electric vehicles^Note  varies by province. British Columbia had the most electric vehicle registrations (Chart 8) out of total vehicle types, at 6.1% in 2023. All provinces recorded increases in the percentage of electric vehicle registrations from 2020. The Prairie provinces (1.6%) and the Atlantic provinces (1.7%) had the lowest percentages in 2023. The initial cost of ownership of an electric vehicle can be higher than that of an ICE vehicle, but lifetime ownership costs vary, given that, for example, electric vehicles consume less or no gasoline. As of a 2019 study,^Note  the levelized cost of ownership is quite similar regardless of engine type, and energy prices are lower in regions such as Quebec and British Columbia. Both new and used battery electric vehicle prices have declined from a year prior as of December 2024, 7.8% for new to $70,682^Note  and 18.4% for used to $42,045, mainly because of an increase in supply and a drop in demand.^Note  Purchase incentives^Note  are also available for various electric vehicles, varying by province.

Data table for Chart 8

Data table for chart 8
Table summary
This table displays the results of Data table for chart 8 2020, 2021, 2022 and 2023, calculated using percent units of measure (appearing as column headers).

	2020	2021	2022	2023
	percent
Note: Electric vehicles include: battery electric, hybrid electric, plug-in electric. Source: Table 23-10-0308-01  Vehicle registrations, by type of vehicle and fuel type.
Atlantic	0.7	0.9	1.2	1.7
Quebec	2.3	3.0	3.8	4.9
Ontario	1.5	1.9	2.5	3.3
Prairies	0.7	0.9	1.2	1.6
British Columbia	3.0	3.8	4.8	6.0

As of 2023, the average cost to repair an electric vehicle was $6,795, higher than the average of $5,122 for ICE vehicles.^Note  Generally, electric vehicles are heavier and have a higher rate of airbag deployment, contributing to higher claim costs. The high costs of battery replacement also add to claim costs, and auto insurers can expect to write off more electric vehicles.^Note  However, recent reports suggest that the cost has begun trending downward and could decline in the next few years. Despite more comparable claims costs for electric vehicles and ICEs, vehicles in general are becoming more complicated and costly to repair, contributing to overall higher claims costs and thus higher premiums.

Vehicle complexity increases vehicle prices and claims costs, impacted further by prices per part and repairs increasing during pandemic

Many ICE vehicles are made up of tens of thousands of parts,^Note  significantly more than electric vehicles; however, electric vehicles require more semiconductors for electric components^Note  . During the pandemic, there were significant supply shortages for semiconductors, among other inputs, as production shutdowns occurred. During this time, vehicle prices (Chart 7) trended upward, mainly because of supply shortages for new vehicles, leading to a substantial increase in the price of used vehicles.^Note 

Data table for Chart 9

Data table for chart 9
Table summary
This table displays the results of Data table for chart 9 Passenger vehicle parts, maintenance, and repair consumer price index, calculated using index 2002 = 100 units of measure (appearing as column headers).

	Passenger vehicle parts, accessories and supplies	Passenger vehicle maintenance and repair services
	index 2002 = 100
Source: Consumer Price Index.
2020
January	136.3	155.6
February	136.3	155.6
March	136.3	155.6
April	137.7	156.2
May	137.7	156.2
June	137.7	156.2
July	138.1	157.0
August	138.1	157.0
September	138.1	157.0
October	137.7	157.9
November	137.7	157.9
December	137.7	157.9
2021
January	138.9	158.8
February	138.9	158.8
March	138.9	158.8
April	138.3	160.1
May	138.3	160.1
June	138.3	160.1
July	139.9	161.9
August	139.9	161.9
September	139.9	161.9
October	142.6	163.3
November	142.6	163.3
December	142.6	163.3
2022
January	146.6	166.0
February	146.6	166.0
March	146.6	166.0
April	148.0	167.6
May	148.0	167.6
June	148.0	167.6
July	153.1	170.8
August	153.1	170.8
September	153.1	170.8
October	154.8	172.5
November	154.8	172.5
December	154.8	172.5
2023
January	159.3	175.2
February	159.3	175.2
March	159.3	175.2
April	160.0	178.0
May	160.0	178.0
June	160.0	178.0
July	162.9	179.4
August	162.9	179.4
September	162.9	179.4
October	163.8	181.7
November	163.8	181.7
December	163.8	181.7
2024
January	164.4	183.7
February	164.4	183.7
March	164.4	183.7
April	164.7	185.5
May	164.7	185.5
June	164.7	185.5
July	165.4	187.0
August	165.4	187.0
September	165.4	187.0
October	165.2	187.9
November	165.2	187.9
December	165.2	187.9

The passenger vehicle parts, accessories and supplies component of the CPI (Chart 9) increased most significantly in late 2021, peaking year over year at 9.4% in July, August, September 2022. Passenger vehicle maintenance and repair services followed a similar trend, peaking at 6.2% year over year in April, May, June 2023. Although year-over-year percentage increases have slowed to movements more consistent with before the pandemic, the index for passenger vehicle parts, maintenance and repairs was 22.3% higher in December 2024 than in 2019. The increase in parts, maintenance and repair costs has a direct impact on the prices insurers pay, as well as the premiums consumers pay.

Vehicle safety features contribute to fewer fatal collisions but also to a higher cost per claim

During the pandemic, collision claims decreased as a percentage of total claims, largely because fewer drivers were on the road. Despite the reductions in 2020 and 2021, the overall trend in claims costs has risen steadily over the past decade.

Data table for Chart 10

Data table for chart 10
Table summary
This table displays the results of Data table for chart 10 Fatal collisions, Personal Injury, Fatalities victims, Serious Injuries victims, Injuries victims (total) and Fatality rate , calculated using number of collisions and rate per 10,000 motor vehicles registered units of measure (appearing as column headers).

	Fatal collisions	Personal Injury	Fatalities victims	Serious Injuries victims	Injuries victims (total)	Fatality rate
	number of collisions					rate per 10,000 motor vehicles registered
Note: Fatality rate per 10,000 motor vehicles registered. Canadian Motor Vehicle Traffic Collision Statistics: 2022 (canada.ca) Canadian Motor Vehicle Traffic Collision Statistics: 2022 (canada.ca) Source: Transport Canada, Canadian motor vehicle traffic collision statistics.
2013	1,772	120,371	1,951	10,662	164,525	0.85
2014	1,675	114,617	1,841	10,445	156,557	0.78
2015	1,693	117,857	1,887	10,835	160,806	0.79
2016	1,738	116,583	1,900	10,573	158,854	0.78
2017	1,698	112,714	1,861	10,104	152,773	0.76
2018	1,754	109,580	1,930	9,463	149,065	0.77
2019	1,620	103,020	1,761	8,917	139,084	0.69
2020	1,602	78,388	1,711	7,868	104,286	0.66
2021	1,628	81,962	1,821	8,185	108,552	0.69
2022	1,746	89,787	1,931	8,851	118,853	0.73

While total claims costs have increased, the fatality rate (Chart 10) has shown improvement compared with historical levels and, as of 2022, was better than in the years before the pandemic. However, despite the lower fatality rate, the number of fatalities reached 1,913 in 2022, representing a 6% increase from 2021 and marking the second-highest count in the past 10 years.^Note  The collision claims ratio (Chart 11) has consistently been higher in Ontario than in Alberta, with particularly notable claims ratios in Ontario of 79% in 2022 and 82% in 2023.^Note 

Data table for Chart 11

Data table for chart 11
Table summary
This table displays the results of Data table for chart 11 Claims ratio Ontario, Claims ratio Alberta, Average cost per claim Ontario and Average cost per claim Alberta, calculated using percent and dollars units of measure (appearing as column headers).

	Claims ratio Ontario	Claims ratio Alberta	Average cost per claim Ontario	Average cost per claim Alberta
	percent		dollars
Source: GISA, author's calculations.
2019	98	69	8,320	6,468
2020	56	48	8,678	6,764
2021	52	50	8,926	7,564
2022	79	65	10,282	9,588
2023	82	55	10,955	9,747

The casualty rates in 2022 varied significantly by province, with rates in the Atlantic provinces ranking among the highest—in some cases double the national level. In 2020, Newfoundland and Labrador experienced the highest rate of fatalities per 100,000 population, and Prince Edward Island held the top spot for 2021 and 2022. The provinces with the highest total populations and busiest roads, Quebec, Ontario and British Columbia, experienced the fewest fatalities as a percentage of the population. It was noted that rural areas often have higher speed limits, with collision sites exceeding 60 kilometers per hour. Speed is commonly one of the contributing factors in fatal collisions.

Car safety is an important consideration for fewer fatalities and casualties. Numerous features are now legally required in vehicles (seatbelts, airbags and backup cameras), making vehicles safer. Crumple zones,^Note  where some of the impact is transferred throughout the vehicle components rather than thrust entirely onto a person’s body, have also been highlighted in recent years. The tradeoff for avoiding personal injury is more vehicle damage and higher repair costs, as the vehicle inputs are costlier, and vehicle damage may be greater. 

The frequency of total loss claims has grown, meaning there has been an increase in the incidence of costs to repair a vehicle exceeding the typical 70% to 80% threshold limit of the vehicle’s depreciated value at the time of the accident. If a vehicle is worth $40,000 and the damage exceeds $30,000, it is likely that, from an insurer’s perspective, it is not worth repairing. In this case, the vehicle would be considered a total loss, and a cheque would be issued at the depreciated value so another vehicle could be purchased. As of 2019, total losses comprise 20% of physical damage claims and make up a nearly equal split between total loss claims and repair claims.^Note  As of 2023, a total loss is more likely because of ongoing supply chain issues, inflation, high rental car costs (Chart A.3) and repair delays, in addition to the aforementioned factors.

Auto theft has increased significantly, contributing to higher claims costs for comprehensive coverage

Comprehensive coverage applies to losses other than those that come under collision or upset^Note  coverage, including specified perils.^Note  Specified perils are items specifically listed for coverage, such as fire; theft; civil disturbance; transport; or extreme weather such as lightning, hail, water, wind and earthquakes. Depending on the specific company and policy, other items may be listed or excluded from the list. Comprehensive coverage is not mandated, but consumers commonly opt into additional coverage to provide adequate protection.

This analysis focuses on Ontario and Alberta, given that Ontario is the largest province and has been the most susceptible to theft, and Alberta has experienced several extreme weather events recently. The claims ratio associated with comprehensive coverage (Chart 12) increased most significantly in Ontario, surpassing 100% in 2021 and peaking in 2023 at 190%. This means that for every dollar Ontario insurers received in comprehensive insurance revenues, the associated claim costs were $1.90. This coverage alone does not indicate unprofitability, but it does push the total claims ratio up—the average claims ratio for all companies in Ontario was 75%, and the NISR was 97%. If insurers experience increasing costs and cannot cut them, they must increase revenues, which can be done largely through premium increases.

Data table for Chart 12

Data table for chart 12
Table summary
This table displays the results of Data table for chart 12 Ontario and Alberta, calculated using percent units of measure (appearing as column headers).

	Ontario	Alberta
	percent
Source: GISA, author's calculations.
2019	90	66
2020	84	95
2021	101	64
2022	164	67
2023	190	73

Across Canada, auto theft frequency (Chart 13) has risen steadily, increasing 27% from 2020 to 2023, reaching nearly 50,000 claims per year. Ontario was impacted most significantly in this period, with an increase of 75%, while there was an increase of 23% for Quebec, an increase of 18% for the Atlantic provinces and a decrease of 4% for the west. Although the frequency of theft claims is substantial, the associated costs per claim increased more significantly. In 2023, theft claim costs at the Canada level surpassed $1.5 billion, up from $489 million in 2019—an increase of 317%. As of the first half of 2024, auto theft has decreased by 17% compared with the first half of 2023, and Quebec experienced the most significant decline.^Note  In 2024, Public Safety Canada, in collaboration with other agencies, put resources toward an action plan on combatting auto theft.^Note 

Newer and luxury vehicles are typically the most vulnerable to theft, as they are worth more, making them more desirable. The make and model of a vehicle therefore contribute to the premiums consumers pay because of the associated risk of theft, so insurers charge higher rates in those cases. It is possible that the rise in vehicle prices has exacerbated the issue, increasing the incentive for theft.

Data table for Chart 13

Data table for chart 13
Table summary
This table displays the results of Data table for chart 13 Claims Cost (in hundred thousand), Average Cost per claim and Claims Count, calculated using dollars and count units of measure (appearing as column headers).

	Claims Cost (in hundred thousand)	Average Cost per claim	Claims Count
	dollars		count
Source: Insurance Bureau of Canada.
2019	4,886	15,031	32,504
2020	5,227	18,205	28,714
2021	7,743	22,749	34,038
2022	13,019	28,656	45,434
2023	15,478	31,156	49,679

Extreme weather claims put pressure on insurers, impacting auto insurance significantly less than homeowners’ insurance

Extreme weather claims—measured by catastrophic (CAT)^Note  claims—have increased substantially in the last several years. Both 2022 and 2023 were record years, surpassing $3 billion in CAT losses, while 2024 was the costliest year on record, surpassing $8.6 billion^Note  in insured losses for CAT claims. Although these claims are more prominent among personal property lines of business, they also impact auto insurance because of garages flooding or vehicles being damaged on the road,^Note  or by hail or falling trees. For auto insurance, CAT claims (Chart 14) made up an average of 2.3% of total claims over the last 10 years. The effects of extreme weather on auto insurers are less clear, given the proportion of these claims among total claims; however, the claim severity costs are much higher for CATs than those of “normal” claims. Regardless of claim type, the trend is an upward one, increasing most significantly from 2021 to 2023. While extreme weather is less of a contributor than several other factors, it should still be considered, given its recent increase and high claims severity.

Data table for Chart 14

Data table for chart 14
Table summary
This table displays the results of Data table for chart 14 Normal claims, Catastrophic claims, Normal claims severity and Catastrophic claims severity, calculated using claim count and claims severity units of measure (appearing as column headers).

	Normal claims	Catastrophic claims	Normal claims severity	Catastrophic claims severity
	claim count		claims severity
Source: GISA, author's calculations.
2013	189,625	9,081	2,682	6,697
2014	191,730	3,433	2,870	7,201
2015	199,869	743	3,000	5,087
2016	210,289	4,657	3,242	7,538
2017	213,294	2,981	3,721	7,913
2018	228,674	10,929	4,225	6,160
2019	236,060	3,453	4,459	7,073
2020	193,575	2,642	4,639	6,350
2021	207,386	3,204	5,331	7,418
2022	251,682	8,318	7,061	8,589
2023	268,698	15,343	8,049	9,149

Auto insurance premiums vary significantly by province, but largely trend upward

Because of higher claim costs and inflationary pressures, consumers are facing higher auto insurance premiums, as measured by the passenger vehicle insurance premiums in the CPI. Despite the declining prices consumers experienced during the pandemic—partially because they drove less and partially because of rebates—auto insurance premiums at the Canada level were above pre-pandemic levels, increasing 36.4% from December 2014 to 2024.^Note  Prior to the pandemic, premiums increased to a high of 9.0% year over year in October 2019 but began dampening and then declined by 6.7% year over year in January 2022. This was largely a result of the aforementioned effects of the pandemic. As of December 2024, premiums rose 8.7% year over year, a moderate dampening than in the months prior. The largest annual gain from 2014 to 2024 was 9.6% occurring in July 2024 and again in September.

Consumers in British Columbia, Saskatchewan and Manitoba saw large price changes during the pandemic, as government insurers offered discounts and rebates. Premium changes are unique to each consumer, based on the timing of renewal, the rebate date, the insurer market share within the region and individual driving habits. Those who parked their vehicles and did not need the full range of coverage were offered steeper rebates and discounts, while those who were still driving received more moderate ones. Such discounts and rebates can be seen in the steep decline across 2021 and into 2022 (Chart 15). Across the remainder of 2022 and into 2023, consumers experienced large price increases, partially exacerbated by the base effect, attributable to low premiums a year earlier.

Data table for Chart 15

Data table for chart 15
Table summary
This table displays the results of Data table for chart 15 Manitoba, Saskatchewan and British Columbia, calculated using index 2002 = 100 units of measure (appearing as column headers).

	Manitoba	Saskatchewan	British Columbia
	index 2002 = 100
Source: Consumer Price Index.
2020
January	140.0	154.6	162.7
February	140.0	154.6	162.7
March	146.0	154.6	162.7
April	146.0	154.6	162.7
May	130.6	156.7	168.4
June	130.6	156.7	168.4
July	130.6	156.7	168.4
August	130.6	156.7	168.4
September	130.6	156.7	168.4
October	130.6	156.7	168.4
November	130.6	156.7	168.4
December	130.6	156.7	168.4
2021
January	130.6	156.7	168.4
February	122.3	156.7	168.4
March	122.3	156.7	168.4
April	125.9	156.7	152.4
May	125.1	136.0	123.2
June	125.1	118.8	123.2
July	125.1	118.8	123.2
August	125.1	118.8	123.2
September	125.1	118.8	123.2
October	125.1	118.8	123.2
November	125.1	118.8	123.2
December	125.1	118.8	123.2
2022
January	125.1	118.8	123.2
February	125.1	118.8	123.2
March	125.1	118.8	123.2
April	122.2	145.7	139.1
May	153.3	146.6	140.1
June	153.3	137.0	128.4
July	153.3	167.8	143.7
August	153.3	167.8	143.7
September	153.3	167.8	143.7
October	153.3	167.8	143.7
November	153.3	167.8	143.7
December	153.3	167.8	143.7
2023
January	153.3	167.8	143.7
February	153.3	167.8	143.7
March	153.3	167.8	143.7
April	158.4	167.9	143.7
May	156.9	168.3	143.7
June	156.9	168.3	145.3
July	156.9	168.3	145.3
August	156.9	168.3	145.3
September	156.9	168.3	145.3
October	156.9	168.3	145.3
November	156.9	168.3	145.3
December	156.9	168.3	145.3
2024
January	156.9	168.3	145.3
February	156.9	168.3	145.3
March	156.9	168.3	145.3
April	158.4	168.3	145.3
May	158.7	169.5	145.3
June	158.7	169.5	145.3
July	158.7	169.5	155.0
August	158.7	169.5	155.0
September	158.7	169.5	155.0
October	158.7	169.5	155.0
November	158.7	169.5	155.0
December	158.7	169.5	155.0

Rates are set and held constant for some time, then adjusted periodically through rate approvals, taking current market conditions into account. Given the significant market share within each province, premiums for these regions are more standardized, where universal rate changes are applied across the board.

Data table for Chart 16

Data table for chart 16
Table summary
This table displays the results of Data table for chart 16 Quebec and Ontario, calculated using index 2002 = 100 units of measure (appearing as column headers).

	Quebec	Ontario
	index 2002 = 100
Source: Consumer Price Index.
2020
January	204.9	195.1
February	205.2	196.9
March	206.9	198.4
April	208.6	198.4
May	213.8	200.5
June	216.2	201.3
July	214.2	201.1
August	216.9	201.1
September	216.9	196.6
October	219.8	196.6
November	219.8	196.6
December	221.6	194.8
2021
January	217.6	195.3
February	217.7	195.3
March	214.0	195.3
April	213.5	195.3
May	218.1	194.3
June	218.1	194.1
July	221.0	188.3
August	221.1	188.3
September	220.9	188.3
October	218.6	188.3
November	218.6	188.3
December	218.6	188.3
2022
January	207.4	188.7
February	207.7	188.7
March	207.7	189.4
April	205.5	187.9
May	210.8	185.3
June	213.5	185.3
July	214.4	185.3
August	214.4	186.0
September	214.4	187.5
October	212.2	187.7
November	212.2	187.7
December	214.4	191.0
2023
January	213.3	189.8
February	212.1	189.8
March	212.3	189.8
April	212.3	190.6
May	212.8	191.9
June	213.7	192.9
July	214.8	195.5
August	221.9	196.3
September	221.9	199.0
October	223.5	201.8
November	225.1	205.5
December	232.3	209.6
2024
January	233.2	210.0
February	232.9	210.5
March	235.2	212.5
April	235.0	213.2
May	236.2	214.3
June	238.1	219.0
July	237.9	220.8
August	236.7	222.7
September	238.0	226.8
October	234.4	227.8
November	237.4	230.4
December	238.3	234.7

The remaining provinces experienced declines through the onset of the pandemic, and in all provinces except Alberta and those where insurance is government-run,^Note  the downward trend continued until late 2021. In Ontario and Quebec (Chart 16), prices increased steadily from 2022 to 2024. Despite increases, Alberta (Chart 17) experienced lower price fluctuations than other provinces, at around 5% year over year for most of 2023. This annual 5% is contradictory to the rate pause set in 2023 by the Alberta government; however, it could be partially caused by pre-approved rates from late 2022, as well as claim incidence. This is not the first rate freeze or cap set by the Alberta government. The last rate cap was from 2017 to 2019, when consumers experienced a 12% increase.^Note  Unlike the other Prairie provinces, auto insurance in Alberta is purchased through private insurers, similar to Ontario, Quebec and the Atlantic provinces. Ontario and Alberta faced the highest average premiums (Chart A.1). Since the onset of the pandemic, insurance costs have increased in all provinces except British Columbia, as of December 2024.

Data table for Chart 17

Data table for chart 17
Table summary
This table displays the results of Data table for chart 17 Alberta, calculated using index 2002 = 100 units of measure (appearing as column headers).

	Alberta
	index 2002 = 100
Source: Consumer Price Index.
2020
January	244.0
February	244.7
March	244.7
April	245.8
May	250.7
June	251.0
July	250.7
August	251.3
September	251.3
October	260.1
November	260.1
December	260.1
2021
January	261.8
February	261.8
March	261.8
April	261.3
May	265.7
June	265.6
July	265.6
August	265.6
September	265.6
October	265.6
November	265.6
December	266.0
2022
January	271.9
February	271.8
March	271.8
April	271.8
May	274.0
June	274.0
July	274.0
August	274.0
September	274.2
October	274.2
November	274.2
December	274.2
2023
January	273.3
February	279.5
March	279.5
April	283.0
May	285.6
June	283.9
July	283.3
August	288.1
September	286.4
October	286.0
November	285.8
December	279.1
2024
January	289.3
February	284.9
March	284.7
April	284.2
May	288.4
June	298.4
July	306.5
August	304.8
September	306.1
October	306.9
November	312.7
December	314.1

Alberta auto insurance faces additional price pressures, and insurers withdraw capacity

As of November 2023, several insurers began withdrawing from the Alberta auto insurance market. Collectively, the departing insurers represented a small share of the market. These exits, scheduled between late 2023 and early 2025, have been attributed to ongoing unprofitability and challenging market conditions. Approximately one-third of insurers in Alberta were unprofitable during this time, and they have indicated that the rate caps are, in part, a factor in the capacity withdrawal and the proportion of claim costs allocated to legal fees increasing.^Note  In November 2024, the Alberta government announced the end of the rate cap and auto insurance reforms to transition to a pure no-fault system, permitting annual 7.5% increases, which can take effect throughout 2025.^Note  The new no-fault model is expected to take effect in 2027.

Appendix

Ontario and Alberta face the highest average premiums

Data table for Chart A.1

Data table for chart A.1
Table summary
This table displays the results of Data table for chart A.1 Average written premium and 10-year historical, average annual percentage change , calculated using dollars and percent units of measure (appearing as column headers).

	Average written premium	10-year historical, average annual percentage change
	dollars	percent
Note: Use averages with caution. Source: Insurance Bureau of Canada, Albertaautoinsurancefacts, Saskatchewan General Insurance, Insurance Company of British Columbia, Manitoba Public Insurance, Consumer Price Index.
Ontario	2,068	3.5
Alberta	1,818	6.6
British Columbia	1,522	0.9
Saskatchewan	1,361	2.3
Manitoba	1,235	3.8
Atlantic	1,259	4.5
Quebec	1,044	4.3

Individual features also impactful

Personal driving habits^Note  and demographic features are important to note when comparing individual insurance premiums. Factors such as age, gender, driver history and, in some cases, credit rating are most impactful when insurers determine personalized risk. Maintaining a clean driving record, choosing a vehicle with a lower theft rate and good security and safety features,^Note  and increasing the deductible all help to reduce premiums.^Note  Overall, insurers rate individuals not only on market consideration but also on individual features, even taking into account the number of kilometers driven per year and whether snow tires are used. When adjudicating premiums, it can also be important to consider multi-line discounts or multi-vehicle policies to reduce overall premiums. Consumers have power over many factors that contribute to lower premiums.

Vehicle make and model impact premiums

The make and model of a vehicle, as well as its age and condition, can be crucial in influencing the premiums paid.^Note  Coupes, two-door vehicles and convertibles are most susceptible to higher-than-average accident benefit claims and direct compensation for property damage, having higher claim costs per vehicle. Owning riskier vehicles can lead to higher premiums. Luxury brands and newer vehicles have comprehensive claims that are higher than average; theft is a significant contributor to this because thieves prefer more expensive vehicles. The price of the vehicle and its risk of theft influence the premium. Collision claims are highest for higher-powered luxury vehicles, which are often sport utility vehicles and have all-wheel drive. Safe driving habits such as maintaining distance, removing distractions, not speeding and remaining calm behind the wheel decrease the chance of a collision, and maintaining a safe driving record leads to lower rates.

Used vehicle and rental vehicle prices reach highs during the pandemic

The pandemic played a significant role in the rising costs of new and used vehicles. Supply chain disruptions for new vehicles and semiconductors, essential for vehicle production, greatly reduced the availability of new vehicles and drove prices up. This caused the price of used vehicles to increase significantly, as demand for vehicles outpaced the supply of new vehicles available.

In late 2020, used vehicle prices began diverging from those of new vehicles. At this time, the CPI for used vehicles was being imputed from new vehicles, but given the divergence, new and used vehicles were separated.^Note  The separate indexes were released in the official CPI in April 2022 on a monthly basis. There is a gap in Chart A.2 because the 12-month values are only available after 12 months. Caution should be used with Chart A.2, as the methodology for the first portion was calculated outside the official CPI, and the data beginning in April 2023 uses the official method now being incorporated.

Data table for Chart A.2

Data table for chart A.2
Table summary
This table displays the results of Data table for chart A.2 Purchase of new and used passenger vehicles (202204 = 100), calculated using 12-month percentage change units of measure (appearing as column headers).

	New vehicles	Used vehicles
	12-month percentage change
Note .. not available for a specific reference period Note: January 2020 to March 2022 calculations outside the official Consumer Price Index. Introduced into official Consumer Price Index April 2023 which requires one year of data to calculate year-over-year index, resulting in one year gap in chart. Source: Consumer Price Index, Measuring price change for used vehicles in the Canadian Consumer Price Index.
2020
January	2.27	1.03
February	2.24	2.78
March	1.03	0.73
April	1.88	0.68
May	1.98	-0.49
June	2.82	0.20
July	3.29	2.80
August	2.19	3.62
September	2.69	3.36
October	2.94	3.33
November	2.01	5.30
December	2.45	5.62
2021
January	2.87	7.11
February	2.79	8.13
March	3.49	8.24
April	3.39	10.20
May	4.94	11.73
June	4.10	14.44
July	5.52	12.61
August	7.13	13.82
September	7.22	13.57
October	6.13	15.28
November	6.03	14.98
December	7.21	18.32
2022
January	5.20	19.71
February	4.70	20.64
March	7.20	24.50
April	.. not available for a specific reference period	.. not available for a specific reference period
May	.. not available for a specific reference period	.. not available for a specific reference period
June	.. not available for a specific reference period	.. not available for a specific reference period
July	.. not available for a specific reference period	.. not available for a specific reference period
August	.. not available for a specific reference period	.. not available for a specific reference period
September	.. not available for a specific reference period	.. not available for a specific reference period
October	.. not available for a specific reference period	.. not available for a specific reference period
November	.. not available for a specific reference period	.. not available for a specific reference period
December	.. not available for a specific reference period	.. not available for a specific reference period
2023	.. not available for a specific reference period	.. not available for a specific reference period
January	.. not available for a specific reference period	.. not available for a specific reference period
February	.. not available for a specific reference period	.. not available for a specific reference period
March	.. not available for a specific reference period	.. not available for a specific reference period
April	5.20	2.00
May	4.30	1.20
June	3.30	0.60
July	3.30	0.40
August	3.10	0.90
September	1.70	1.10
October	1.80	1.00
November	1.90	0.90
December	3.40	0.30
2024
January	4.50	-1.80
February	3.30	-1.90
March	2.10	-2.90
April	1.40	-2.30
May	2.60	-2.80
June	1.80	-4.50
July	1.00	-5.70
August	1.30	-6.70
September	2.20	-7.60
October	2.30	-6.40
November	2.40	-5.50
December	0.90	-4.10

As the pandemic set in, many major rental car operators sold off their fleets. When the economy opened back up and consumers began demanding travel accommodations, there was a significant shortage of available rental vehicles. The rental of passenger vehicles (Chart A.3) component in the CPI peaked from September to November 2021, at 60.4% year over year. As of December 2024, rental vehicles cost 20.4% more than they did in December 2019, a dampened figure compared to pandemic highs. Rental vehicles were most costly in June, July, and August 2023 a 74.7% increase from December 2019, partially due to the compounding effect from previous increases across 2021.

Data table for Chart A.3

Data table for chart A.3
Table summary
This table displays the results of Data table for chart A.3 Rental of passenger vehicles, calculated using 12-month percentage change units of measure (appearing as column headers).

	Rental of passenger vehicles
	12-month percentage change
Source: Consumer Price Index.
2020
January	2.7
February	2.7
March	-6.4
April	-6.4
May	-6.4
June	-9.0
July	-9.0
August	-9.0
September	5.3
October	5.3
November	5.3
December	7.2
2021
January	7.2
February	7.2
March	22.0
April	22.0
May	22.0
June	29.8
July	29.8
August	29.8
September	60.4
October	60.4
November	60.4
December	24.0
2022
January	24.0
February	24.0
March	19.4
April	19.4
May	19.4
June	28.5
July	28.5
August	28.5
September	-8.1
October	-8.1
November	-8.1
December	1.3
2023
January	1.3
February	1.3
March	2.0
April	2.0
May	2.0
June	5.4
July	5.4
August	5.4
September	-2.2
October	-2.2
November	-2.2
December	-5.0
2024
January	-5.0
February	-5.0
March	-19.1
April	-19.1
May	-19.1
June	-16.2
July	-16.2
August	-16.2
September	-4.9
October	-4.9
November	-4.9
December	-5.8