The American Consumer Institute (ACI) has announced that proposed legislation requiring Original Equipment Manufacturers (OEMs) to overpay dealerships for warranty compensation will result in increased costs for consumers. This announcement was made in an ACI article on March 5.
According to the ACI’s website, overcharging OEMs for warranty compensation leads to higher vehicle costs for consumers, as manufacturers pass these expenses onto buyers. The provision effectively shifts income from consumers to dealerships, increasing the financial burden on car purchasers.
New Jersey 101.5 reports that New Jersey auto insurance premiums have surged by an average of 17.2% in 2025, following consecutive double-digit hikes in previous years. The rising costs are attributed to higher claims expenses, labor shortages, and the increasing cost of advanced vehicle technology. Additionally, a 2023 mandate requiring higher minimum liability coverage has further contributed to premium increases.
Third-party litigation funding (TPLF) allows external investors to finance lawsuits in exchange for a share of the settlement or award. According to Enlyte, TPLF contributes to rising insurance costs by driving up claim payouts, prolonging litigation, and encouraging excessive jury awards. The increase in nuclear verdicts—cases awarding over $10 million—forces insurers to raise premiums, reduce coverage availability, and increase policyholder costs. In response, states like Florida and Georgia have introduced tort reform measures, including mandatory disclosure of litigation funding agreements and limits on contingency fees, to promote transparency and curb the financial strain on the legal and insurance systems.
The ACI is a nonprofit organization dedicated to promoting consumer welfare through economic research and policy analysis. It advocates for free-market solutions, fiscal responsibility, and data-driven insights to assess the impact of public policies on consumers.
