Insurance Costs Are Quietly Wrecking the Deal

Episode Focus

Insurance is one of the biggest costs of vehicle ownership, but it is often treated like something that happens after the deal. With premiums shifting again in 2026,  'do you know your market's number?" OR, MD, UT are looking at +8-21 while VT, MN more like 6-13% - would make it more about variance state by state and needing to be educated about affordability and how insurance can more dramatically impact buyer's decisions in your staterepair costs rising and rates varying dramatically by market, should insurance become part of the affordability conversation before the customer signs?

Opening Hook

You found the car.

The customer loves it.

Credit is approved. You're ready to deliver.

Then they call their insurance company.

And the quote kills the deal.

So what happens now?

Because dealers don't control insurance rates, but they absolutely deal with the consequences when insurance makes the vehicle unaffordable.

Today we're talking about when insurance becomes a dealership problem, which vehicles and customers may feel it most, and whether checking that number earlier could actually help you save the deal.

 

Segment 1: Can Insurance Actually Kill the Deal?

Conversation Starters

  • At what point does proof of insurance typically enter the buying process?

  • What happens when the customer gets to that point and the premium is significantly higher than expected?

  • How often does the customer blame the dealership even though the dealer has nothing to do with setting the rate?

  • What options does the desk have if the customer suddenly says, “I can't afford the car anymore”?

Scenario

Customer budgets:

$650 car payment

They get approved at: $625

Everyone thinks the deal works.

Then the insurance quote comes back significantly higher than what they were paying on their previous vehicle.

Now what?

Do you:

  • Restructure?

  • Find another vehicle?

  • Increase the down payment?

  • Let the customer walk?

  • Send them shopping for another insurance carrier?

Core Idea: The deal can work on paper and still fail in the real world.

 

Segment 2: Why Did This Car Get THAT Insurance Quote?

“Why is this car so expensive to insure?”

Conversation Starters

  • Are newer vehicles becoming more expensive to repair even when the accident itself is relatively minor?

  • Legacy insurance  - families, etc, brand loyalty

  • maybe we touch on cost of parts to replace - 2200 Range rover windshield vs. Civic

  • How much are cameras, sensors and calibration changing repair costs?

  • Could two similarly priced vehicles have dramatically different insurance costs?

Factors to Explore

  • Vehicle value

  • Repair costs

  • Parts availability

  • Theft risk

  • Driver age and profile

  • Location:

    • New Jersey saw an approximately 20% increase in 2025.

    • Oregon, Maryland and Utah are forecast to see notable increases in 2026.

    • Vermont, Minnesota and Mississippi are among markets forecast to see declines.

  • EV-specific repair considerations: EVs are much more expensive to insure than ICE vehicles (42% from google search). Conversely we should also touch on higher cost of insurance in the episode we are encouraging dealers to find the right EV candidates

Core Idea:  The price of the vehicle does not necessarily tell you the cost of insuring it.




Segment 3: Who Is Most Likely to Get Blindsided?

Make this about recognizing the situation before it becomes a problem.

Conversation Starters

  • What questions could help identify potential insurance sticker shock without the salesperson pretending to be an insurance agent?

Buyer Scenarios to Explore

  • First-time buyers

  • Younger drivers

  • Someone moving from an older vehicle into a newer one

  • Customer going from sedan to SUV or performance vehicle

  • Buyers moving into EVs

  • Customers adding another driver

  • Buyers focused entirely on monthly payment

Core Idea: You don't need to know the customer's premium to recognize when insurance might become a factor.

 

Segment 4: Can a Different Car Save the Deal?

If the insurance quote comes back too high, the deal isn't necessarily dead.

Conversation Starters

  • Could another vehicle with similar utility create a more manageable total monthly cost?

  • Should insurance ever become another variable in vehicle selection?

  • Could this become another reason to offer multiple options? Talk about Upstart  Multi - Multi. 

Core Idea: Sometimes saving the deal means changing the car, not changing the financing.

 

Segment 5: When Should Insurance Enter the Conversation?

Now we get to transparency.

Not: “Dealers need to quote insurance.”

Debate Question: Could bringing up insurance actually kill deals that would otherwise close?

That's worth discussing honestly.

Because a dealer could reasonably say:

Why would I introduce another objection?

And the counterargument is:

Would you rather deal with the objection now or an angry customer after delivery?

Core Idea: The goal isn't to add another step. It's to eliminate another surprise.

 

Closing Thought

Insurance isn't your product. But the customer experience is.