Donald Trump’s promise to lower auto insurance costs comes with big questions

Former President of the United States and current presidential candidate Donald J. Trump made an interesting promise on Twitter earlier this week: descent car insurance rates. That would be a major boon for American drivers, putting tons of money back into our collective pockets, if not for one small problem. He can’t do it.

In a Sept. 17 tweet, Trump claimed that auto insurance rates have risen 73 percent and said he would “cut that number in half” if elected. What the tweet omitted was accurate How a sitting president—a theoretical small-government conservative—would actually cut costs for private companies.

Trump’s claim of a 73% increase in insurance rates is accurate when comparing average prices from June 2024 to May 2020but he claims he can do anything about is more specious. The federal government has economic levers it can pull, but they’re usually broad—even adjusting interest rates is a indirect processlet alone the rates charged by private corporations’ assessments of their clients’ risk. This is one area where the federal government simply has no influence.

Insurance industry analysts are not as convinced that Trump’s plan is possible. Insurance journal spoke with former president of the Insurance Information Institute, Robert Hartwig, who said:

Returning to Trump’s claim that it can affect auto insurance rates, Hartwig said, “That’s a lie.”

“Someone should explain to Trump that insurance — and insurance rates — are regulated by the states, not the federal government,” Hartwig said. “If Trump on day 1 could wave his hand and cut auto insurance rates by 50%, auto insurance would instantly stop being sold by any auto insurer in the United States. The reason, of course, is that if insurers were forced to sell car insurance at 50% of the current price, it would lead to huge losses and the eventual insolvency of the insurer – so they wouldn’t sell at all.

Insurance is a private industry – a regulated one, sure, but not one where prices can be decided by fiat. Editor-in-chief at the International Center for Law and Economics, Ray Lehmann, said as much News Net Insurancealbeit with a slightly more optimistic view of Trump’s comments than Hartwig:

There are a few things the federal government could do, Lehmann said. “You could invest in the National Highway Traffic Safety Administration to do a much more aggressive distracted driving campaign. Inflation is a monetary policy issue, which is the Fed. And the administration has some influence over the Fed. So reducing overall inflation would reduce the acceleration of claims growth. We have probably already reduced inflation, but it is possible that it will be reduced further in the future.”

“So these are all things that the president could do, or Congress and the president working together could do. But I don’t think it’s reasonable to say that you could promise any specific price reduction. 

Some of the federal government’s economic controls can influence the cost of auto insurance in a small way. However, they will not drastically reduce rates, especially by a certain percentage. The goal of saving consumers money might be one that plays well on the campaign trail, but it’s the rare kind of political promise that’s completely impossible to keep.

Jalopnik has reached out to the Trump campaign for details on the former president’s plans, but has yet to hear back. If the campaign responds, we’ll update this article.

A version of this article originally appeared on Jalopnik.