Insurance premiums could continue to rise

A recent Fleet News survey revealed that fleet decision-makers believe insurance premiums are the most likely element of their cost base to rise over the next 12 months.

Almost three-quarters (73%) of respondents predicts insurance costs would increase on the back of steady rises over the past two-to-three years.

However, comparison site Confused.com recently reported the first fall in insurance premiums in almost three years, suggesting a possible market stabilisation.

Auto Trader director of automotive finance Rachael Jones, speaking on this month’s Fleet News Quarterly Market Insight, said: “Insurance costs, even compared to historical norms, are very high, particularly for younger drivers with quotes for 17–18-year-olds well over £2,500 pounds a year on average.

“When we've done research on it, we ask consumers ‘of all the motoring costs that you consider and think about, which you think about the most’. Insurance is the one that they feel has it has increased the most.”

However, while premium rises are putting pressure on fleet and individuals’ costs, Jones doesn’t believe it has affected registrations.

“There's still very good demand for used cars and new cars in the market,” she said. “We are just seeing them place more of an emphasis on running costs and looking to suss out the costs of what they will be paying now versus what they've been used to.

“I think EVs is one to watch, because there are quite a few media outlets claiming that premiums for electric vehicle insurance could still rise. There's not a lot of data out there to talk to how much repairs might cost, or whether it's been sufficiently repaired. And so I think that's probably one to keep an eye on to see how we navigate that as a market.”