The dip in auto insurance expenditure in 1999 and 2000 that looked at the time like a promising trend for car owners turned out to be nothing more than a market fluctuation.  When average expenditures decreased in 1998 and 1999 for the first time since 1973, some experts forecasted even more savings for some drivers in the following years, an issue which Insure.com explored in a previous article.

Unfortunately, the decreasing trend was superlatively short-lived.  In 2000, expenditures increased; in 2001, they increased at seven times the 2000 rate; and in 2002 they increased again, this time at eleven times the 2000 rate.  The drastic increase, however, was similarly brief, as rates soon returned to normal levels, indicating that perhaps the surge served only to balance the aberrant decrease of ’98 and ’99.

Overall, average expenditure has increased at a reasonable, if unsteady, rate.  In fact, over the past five years, and even more over the past ten, the rates are comparable to the inflation of the Consumer Price Index—a good indication of a steady market.

The average auto insurance expenditure did not suffer inordinate jumps due to always-rising SUV sales as some analysts feared.  Rather, SUV sales declined as gas prices climbed and a smorgasbord of smaller and more fuel-efficient vehicles emerged on the market.

The growth rate of average expenditure slowing down again, decreasing in 2006 for the first time since 2000.  So even though the hopes of 1998 and 1999 were unrealized, we are in a similar position today.  Expenditure growth is slowing, and we are perched at another brink of a turndown in the cycling market.