--- title: Gas Prices and Car Insurance Costs Nudge Inflation Rates Higher description: The inflation rate is higher than expected partially due to rising gas prices and car insurance premiums that are up over 19% in a year. authors: - name: Pete Grieve role: Lead News Reporter url: https://money.com/author/pete-grieve/ bio: Pete Grieve is a personal finance reporter at Money who frequently writes about news and trends related to car buying, auto insurance and gas prices. education: University of Chicago, BA Political Science at_money_since: 2022 articles: 597 covers: - Personal Finance - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Professional Services - Retirement - Shopping - Taxes social: - https://twitter.com/pete_grieve - https://linkedin.com/in/pete-grieve-b5aa02138 - https://www.facebook.com/petegrieve4 editors: - name: Brad Tuttle role: Senior Editor url: https://money.com/author/brad-tuttle/ bio: Brad Tuttle is a former senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals. education: Columbia University School of Journalism, MS at_money_since: 2014 articles: 366 covers: - Personal Finance - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Pets - Professional Services - Retirement - Shopping - Taxes - Technology social: - https://twitter.com/bradrtuttle - https://linkedin.com/in/brad-tuttle-834b225 former_staff: true published: '2023-09-13T18:10:16.000Z' modified: '2024-02-29T16:23:29.000Z' section: Personal Finance tags: - News word_count: 581 canonical: https://money.com/gas-prices-car-insurance-inflation-higher/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Illustration of a balloon holding up a car](https://img.money.com/2023/09/News-Gas-prices-car-insurance-costs-keeping-inflation-high.jpg?crop=0px%2C191px%2C2880px%2C1620px&quality=85) The annual inflation rate increased to 3.7% in August with higher [gasoline](https://money.com/how-to-save-money-on-gas/) and [auto insurance](https://money.com/best-auto-insurance/) prices contributing to the overall rise, even as costs for many other items declined. Inflation over the past 12 months, as measured by the [consumer price index (CPI)](https://www.bls.gov/news.release/cpi.nr0.htm), increased slightly in July and August after a 12-month stretch of declines from the June 2022 [peak of 9.1%](https://money.com/inflation-june-2022-cheaper-prices/). The increase in inflation isn't necessarily cause for panic, as officials say the higher inflation rate is largely due to a rise in the cost of gas, a notoriously volatile good that remains much less expensive than the peak hit in 2022. Gas prices increased 10.6% from July to August and represented more than half of the increase in inflation for the month, according to the CPI. ## Inflation rises again in August As the inflation rate increased in August, the CPI reading was 0.6% higher than in July. Energy prices, which increased by more than 5% in August, are included in the consumer price index, but excluded from other inflation trackers that are monitored more closely by the Federal Reserve. Removing energy and food, core monthly inflation was lower: 0.3%. In light of the latest CPI report, Social Security recipients can look forward to a slightly higher-than-anticipated COLA (cost of living adjustment) for 2024. The new estimate calls for a 3.2% [rise in Social Security benefits](https://money.com/social-security-cola-over-3-percent/) next year, though the figure is not final. Some of the [worst months for gas prices](https://money.com/why-gas-prices-going-down-2022/) in the aftermath of Russia’s invasion of Ukraine came in the summer of 2022. Because those high gas price months are now more than a year in the past, they're falling out of the annual inflation rate calculation, causing the CPI to rise. ## Gas prices push inflation higher For the entire first part of 2023 up until last week, gas prices had been lower compared to year-ago levels. But the average price for a regular gallon ($3.85 per [AAA](https://gasprices.aaa.com/)) is now 14 cents higher than this time in 2022. Drivers can reasonably hope for some relief at the pump in the fall months. On Saturday, most gas stations will make the switch back to [winter-grade gasoline](https://money.com/gas-prices-fall-before-elections-president/), which is cheaper than the fuel blend used in the summer, according to [GasBuddy](https://www.gasbuddy.com/go/west-coast-corn-belt-see-gas-price-spike-push-national-average-higher). Moreover, gasoline demand is typically lower when Americans start driving less after Labor Day, and that tends to take pressure off prices. Yesterday, the [Energy Information Administration](https://www.eia.gov/outlooks/steo/), a federal agency, released an updated forecast that gas prices will average $3.69 per gallon through the end of the year. ## Car insurance prices are up 19.1% Beyond gas prices, insurance — especially auto insurance — was another driver of inflation in August, according to the U.S. Bureau of Labor Statistics. [Auto insurance prices are soaring in 2023](https://money.com/car-insurance-inflation-2023/) as insurers raise premiums to keep up with their own rising costs. Car insurance prices increased another 2.4% from July to August, according to the CPI, bringing the annual increase to a whopping 19.1%. Higher vehicle prices, more expensive car repairs, medical inflation and high incidence of accidents are some of the factors insurance companies blame for their rate hikes. While gasoline and car insurance prices were chief among the contributors to higher inflation in August, other CPI categories that saw price increases in August include housing, medical care and personal care. Some of the indexes that had price declines in August include those for lodging away from home, used vehicles and recreation, according to the CPI report. ## **More on Car Insurance** | | | --- | | **Money’s Top Picks** [8 Best Car Insurance Companies of 2024](https://money.com/best-auto-insurance/) [6 Best Commercial Auto Insurance Companies](https://money.com/best-commercial-auto-insurance-companies/) [7 Best Car Insurance Companies in Florida](https://money.com/best-car-insurance-florida/) **Car Insurance Reviews** [CURE Auto Insurance Review](https://money.com/cure-auto-insurance-review/) [AAA Auto Insurance Review](https://money.com/aaa-auto-insurance-review/) [Lemonade Car Insurance Review](https://money.com/lemonade-car-insurance-review/) **Learn More** [How to Lower Car Insurance Premiums](https://money.com/how-to-lower-car-insurance-premiums/) [Tips for First-Time Car Insurance Buyers](https://money.com/tips-for-first-time-car-insurance-buyers/) [How Does Car Insurance Work?](https://money.com/how-does-car-insurance-work/) | ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/gas-prices-car-insurance-inflation-higher/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Personal Finance", "item": "https://money.com/personal-finance/" }, { "@type": "ListItem", "position": 3, "name": "News", "item": "https://money.com/tag/news/" }, { "@type": "ListItem", "position": 4, "name": "Gas Prices and Car Insurance Costs Nudge Inflation Rates Higher" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/gas-prices-car-insurance-inflation-higher/#webpage", "url": "https://money.com/gas-prices-car-insurance-inflation-higher/", "name": "Gas Prices and Car Insurance Costs Nudge Inflation Rates Higher", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2023-09-13T18:10:16.000Z", "mainEntity": { "@id": "https://money.com/gas-prices-car-insurance-inflation-higher/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/gas-prices-car-insurance-inflation-higher/#breadcrumb" }, "dateModified": "2024-02-29T16:23:29.000Z" }, { "@type": "NewsArticle", "headline": "Gas Prices and Car Insurance Costs Nudge Inflation Rates Higher", "articleSection": "Personal Finance", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2023/09/News-Gas-prices-car-insurance-costs-keeping-inflation-high.jpg?crop=0px%2C191px%2C2880px%2C1620px&quality=85", "width": 1012, "height": 569, "caption": "News-Gas-prices-car-insurance costs-keeping-inflation-high" } ], "author": [ { "@type": "Person", "name": "Pete Grieve", "url": "https://money.com/author/pete-grieve/", "@id": "https://money.com/author/pete-grieve/#author", "description": "Pete Grieve is a personal finance reporter at Money who frequently writes about news and trends related to car buying, auto insurance and gas prices.", "image": "https://img.money.com/2023/02/peter.png?w=350&h=430&crop=1", "email": "peter.grieve@money.com", "jobTitle": "Lead News Reporter", "alumniOf": "University of Chicago, BA Political Science", "sameAs": [ "https://twitter.com/pete_grieve", "https://linkedin.com/in/pete-grieve-b5aa02138", "https://www.facebook.com/petegrieve4" ], "worksFor": { "@id": "https://money.com/#organization" } } ], "publisher": "https://money.com/#organization", "datePublished": "2023-09-13T18:10:16.000Z", "description": "The inflation rate is higher than expected partially due to rising gas prices and car insurance premiums that are up over 19% in a year.", "abstract": "The inflation rate is higher than expected partially due to rising gas prices and car insurance premiums that are up over 19% in a year.", "@id": "https://money.com/gas-prices-car-insurance-inflation-higher/", "inLanguage": "en-US", "dateModified": "2024-02-29T16:23:29.000Z", "editor": [ { "@type": "Person", "name": "Brad Tuttle", "url": "https://money.com/author/brad-tuttle/", "@id": "https://money.com/author/brad-tuttle/#author", "description": "Brad Tuttle is a former senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals.\r\n\r\n", "image": "https://img.money.com/2014/01/Brad-Tuttle.png?w=226&h=247&crop=1", "alumniOf": "Columbia University School of Journalism, MS", "sameAs": [ "https://twitter.com/bradrtuttle", "https://linkedin.com/in/brad-tuttle-834b225" ] } ], "wordCount": 581, "keywords": [ "News" ], "about": [ { "@type": "Thing", "name": "Personal finance", "sameAs": [ "https://en.wikipedia.org/wiki/Personal_finance" ] }, { "@type": "Thing", "name": "Vehicle insurance", "sameAs": [ "https://en.wikipedia.org/wiki/Vehicle_insurance" ] }, { "@type": "Thing", "name": "Gas prices", "sameAs": [ "https://en.wikipedia.org/wiki/Gas_prices" ] } ] } ] } ```