Why Car Insurance Premiums Feel Higher in 2026 Even Without a Rate Hike
Analysis · Published 24 July 2026 · Updated 24 July 2026
Written by Arjun Malhotra, Cars Editor
Car insurance premiums feeling higher in 2026 isn't primarily a tax story — GST on car insurance has stayed flat at 18%.
Quick Answer
Rising repair costs on sensor-packed modern cars, plus periodic third-party tariff revisions, are driving premiums up — not GST, which hasn't changed.
Modern Cars Cost More to Repair
Modern cars increasingly pack sensors, cameras and electronic components into body panels and bumpers that were once simple sheet metal, meaning even minor accident repairs now cost meaningfully more than equivalent models a decade ago.
Base Premiums Are Being Recalibrated
Insurers price this rising repair cost into base own-damage premiums well before any add-on or GST consideration comes into play, which is why the increase shows up even for policyholders who haven't changed their coverage at all.
What Actually Helps Manage the Cost
For owners genuinely trying to manage rising premiums, the more effective lever is comparing insurers and reviewing which add-ons are actually necessary rather than expecting the underlying cost pressures to reverse.