Insurance premium rises target older drivers

Sep 27, 2017

Historically, older drivers have enjoyed lower car insurance premiums than other age groups and been less hard hit by market increases. However, since May, insurance premiums have risen at five times the rate of inflation and older drivers are the ones seeing the highest percentage increase.

Is this unfair opportunism by insurers taking advantage of a group with previously lower prices? Or is the increase justified for older drivers – are they simply more of a danger on our roads?

The insurance market

According to the latest figures, premiums have increased by an average of 14.6% in the last 12 months to reach an average figure of £755.  This is a rate that is five times the inflation rate of 2.9%. The rises mean that younger drivers now pay an average premium of £1,719.

Insurers have blamed a number of factors for the shocking rises including the increase in taxes, the weak pound and changes to the discount rate used to calculate claim pay-outs where personal injury is involved. This is in addition to the standard declaration of increased claim costs.

While younger drivers (and often their cash-strapped parents) are used to eye-watering premiums, older drivers are not. However, it seems that the latest rises are looking to reverse that situation, with older drivers experiencing the biggest increase, at an average rise of 16.5%. That puts the average premium for this age group at £434, according to Consumer Intelligence.

The older driver market

Many argue that older drivers have seen the steepest premium rises because they are responsible for more crashes than before, but do the figures back up this assertion?

According to the Department of Transport, in March 2016 there were 4.5 million people aged 70 or over with a license. 236 of these were over the age of 100.

As drivers age, they have a greater risk of health conditions that can affect their driving, such as poor eyesight or reduced reflex response time. However, researchers have shown that old age doesn’t necessarily equal more accidents. Older drivers are more likely to be killed or seriously injured in a road accident, but this isn’t always due to a poorer quality of driving – they are simply more vulnerable to injury than younger people.

Curiously, one area that did highlight an issue was making right-hand turns. 13% of those aged over 70 have had an accident involving a right-hand turn. That compares to just 7% of drivers under the age of 70. Simulator tests show that older drivers take longer to make this manoeuvre than younger ones.

Personal injury claim rates

One of the big problems blamed for the recent insurance price increases was the change to how the rate for personal injury claims was calculated. This went from -0.75% to 2.5% in a much-criticised move back in March, which aimed to ensure the long-term injured received the right payout.

The move was also behind earlier price rises. However, in September, the government announced it would change the rate again, slowing down the rate of price increase. It also says that the rate will be reviewed at least every three years, which Consumer Intelligence believes has helped stabilise prices.

The big picture

GPs have an obligation to let DVLA know if a driver is no longer fit to drive. Family members are also urged to report anyone they think is a risk. However, our ageing population means that the number of older drivers continues to increase. Could it be that this is the real reason for the increase in premiums for older drivers – that this age group is growing and thus the potential for greater profits is higher?

Should older drivers pay more for their car insurance? Or is this just another money-grabbing venture by insurance companies looking for a new group to target? Leave a comment below to share your opinion. 

Diesel drivers defy the government!

Sep 27, 2017

Despite the recent debates over diesel vehicles, and the government announcing that it is going to ban the sale of them from 2040 to fight against air pollution, drivers remain defiant in their plans to purchase diesel cars. So much so, in fact, that the price that used diesels cars are selling for increased by 6% in August year on year. Meanwhile, searches for diesel cars rose between May and August too. According to research carried out by Auto Trader, not only are people still buying diesel cars, they’re willing to pay more for them too.

Diesel is most popular fuel

The Auto Trader research also uncovered that 55% of consumers have been searching for diesel cars over any other fuel type. In addition, half of those who already own a diesel car are intending to buy a similar vehicle the next time they’re in the market for one. This suggests that those who own diesels still see them as being the best type of car to own, even though they have been shown to be detrimental to the environment.

Auto Trader has said that its research shows that the public still has a strong appetite for diesel cars. The negative press  surrounding them doesn’t seem to have put people off buying them.

It also seems that people are happy to keep hold of their old diesel vehicles. Diesel car adverts only increased by 0.3% year on year, suggesting that those who own them aren’t concerned about what they’ve been hearing and are happy to go on driving their current models.

Diesel bans around Europe

It’s not just the UK government that is warning people about the effects that owning a diesel car has on the environment. Cities around Europe are also acting to try to make their air cleaner and their roads less toxic. They are doing this by planning a range of different bans, with some cities planning to enforce these sooner than others.

Oslo in Norway, for example, is currently going through a temporary diesel ban. This was put into place at the beginning of the year. Meanwhile, Barcelona has vowed to ban cars more than 20 years old from its roads from 2019.

Working to a similar timescale to the UK, Paris will have a ban on new petrol and diesel cars by 2040. With the more immediate future in mind, Athens aims to have all diesel cars and trucks off of its roads by 2025.

Making diesel drivers pay

As well as banning the sale of petrol and diesel cars from 2040, the UK government is also introducing a tax for those who drive older diesel cars that don’t meet the strict Euro-6 emissions standards.

Interestingly, the research carried out by Auto Trader also suggests that consumers are finding the task of buying a new car more challenging. Buyers are feeling confused and anxious about the news surrounding different fuel types and the new taxation penalties for diesel drivers are no doubt further clouding the issue.

Working together

It is important for motorists to focus on the fact that both the government and car manufacturers are working together towards the same goal of creating better air quality. This is why they are introducing safer, more efficient cars to the UK’s roads.

This is reflected in the fact that so many car manufacturers are now offering diesel scrappage schemes. Their goal is to get older, more polluting vehicles off of the roads, and to help their customers to purchase cleaner models. This approach will help to reduce the overall level of toxins released into the air.

With this in mind, it is vital that drivers don’t let negative press control their decisions about which cars to buy, and that they complete their own research to gain a good understanding of the options available.

Has the recent negative publicity made you feel more inclined to ditch your old diesel in favour of a different fuel type? Or do you plan to stick with diesels for the foreseeable future? Leave a comment to let us know! 

Electric cars are far from the only solution

Sep 20, 2017

The boss of one of the leading car manufacturers has voiced his concerns at the idea of a total ban on combustion engines. Speaking at the Frankfurt Motor Show, Carlos Tavares, the head of PSA Peugeot Citroen and Vauxhall/Opel, has accused governments of putting the entire car industry at risk with their plans to focus almost solely on electric vehicles as the cars of the future.

Jobs at risk

In his speech, Tavares stated that governments dictating technology will create considerable strife within the motor industry. More than that, it will put finances and jobs at risk. It could even lead to new health and safety issues that future governments will be solely responsible for.

He said that we are moving from a “technology neutral era” to an “instruction to go electric.” This shift is at the expense of other technologies, such as the highly efficient PSA Hybrid Air system. The focus on only electric vehicles puts the scientific responsibility firmly into the hands of governments. As such, if in two or three decades, there are problems with health or safety issues due to this switch to electric, governments will need to face the consequences of their narrow outlook.

Unsustainable industry

The Portuguese car boss also criticised the current heavily subsidised market for electric cars. He argued that this is a poor basis for dictating their adoption. It could risk profitability and therefore jobs for car manufacturers. In fact, Tavares went so far as to say that it could even impact the sustainability of the entire motor industry:

“If you have ministers in Europe who say they will forbid the use of internal combustion engines, then I have to comply and we will have to transform, re-engineer and retrain. But if electrification is not profitable in future, we all have a problem,”

He also called for a wider debate on the question of the forced move to electric cars from an affordability perspective. Electric vehicles cost more than their petrol or diesel equivalents, meaning that fewer people could be able to afford a car in future. This is a much wider social issue and one that should be open for discussion.

Practical concerns

In addition to worries about the overall effect of the switch to electric, others are more concerned about the practical concerns associated with electric cars. One example is the question of what we should do with the lithium-ion batteries in cars once they run out. Tiny lithium-ion batteries are in use in many devices and already use a lot of resources – around $2 billion in metals and minerals in 2015 alone. Most of these end up in landfill sites or sit unused in devices around the home.

The battery in a car is obviously much bigger and will last a lot longer. However, there is still a suspected limit of around 8-10 years for each battery. This will mean that the already spiralling demand for the components for these batteries will rapidly increase as more electric cars reach the road. This will increase prices for raw materials. Cobalt, for example, has risen 80% in the last year. It also raises the question of how we dispose of batteries that have reached the end of their life without negatively impacting the environment.

Power infrastructure

The other big consideration is the infrastructure needed to power these cars. Estimates say that billions will be needed to create new power plants, grid network and charging points for electric vehicles. Some predict local power shortages when the ban on petrol and diesel cars come into force.

Overnight charging should make the process more manageable, but there is still a lot of work to be done if electric cars are going to become the dominant force on the UK’s roads.

Is government policy pushing us towards electric vehicles when we should be considering other options? Will the car industry – and the power grid – be able to cope with the mass electrification of our cars? As ever, share your views below. 

UK’s most car friendly cities unveiled

Sep 20, 2017

New research from Oponeo has revealed which cities in the UK are the most car friendly. The research analysed everything from vehicle maintenance costs and safety to how easy the cities are to commute through. The results may well surprise you!

Top of the table was the Scottish city Glasgow, which the research found to be the most car-friendly city in the UK. It was closely followed by Leeds and Sheffield. At the other end of the scale, Cardiff, Liverpool and London were found to be the UK’s least car-friendly cities. Oponeo’s Giles Kirkland comments,

“Driving in big cities, especially old cities which were never developed with cars in mind, is no easy feat anywhere these days. However, there are places which are more car-friendly than others. To see which cities are doing well in this regard, we took into account criteria such as road safety, the price of fuel, insurance and parking. Some of the results came as a surprise: I used to live in Bristol and thought the traffic there was rather slow – now I know it’s the second best in the country!

“What isn’t surprising is the greatest loser of all – London. It’s the slowest, most expensive and least comfortable city in the UK for drivers. Public transport or bikes are definitely better alternatives for Londoners.”

Car costs by city

The cost of car insurance has been on the rise. Where you live has a big part to play in how much your premiums are. The most expensive place to insure a car out of the 12 cities included in the research is Liverpool. A middle-aged professional male there can look at spending £1,411.20 to insure his car worth £13,000.

The same individual would pay just £787.21 to insure his car in Edinburgh, which was the cheapest city to purchase car insurance. Bristol came in second cheapest at £802.26, and Leicester was the third cheapest at £857.92.

Parking costs

Another cost to consider when living in a city is the price of parking. The most expensive city to park in is, perhaps predictably, London. Parking there will set you back an average of £8.50 per hour. That’s way out in front of the second most expensive city for car parking, which is Edinburgh, at £5 per hour.

The cheapest city to park in is Birmingham, where it will cost you an average of just £1.50 to park up for an hour. Sheffield and Manchester aren’t far behind, costing just £1.60 and £1.63 per hour respectively.

One further cost that was considered during this research is the cost of having your car serviced. To service a Ford Fiesta would cost a reasonable £165.50 in an independent garage in Belfast, and £239 if you were to take it into a dealership.

In contrast to this, an independent garage in London would charge you £220.50 to service the same vehicle, while a dealership in the capital would cost a massive £337.50. One again, this is far more than the second most expensive city for a car service – Edinburgh – where an independent service would cost £174, and one carried out in a dealership would be £254.50.

Dodge the stress of commuting

The Oponeo research looked at the average speed that a car can drive through the city centre, and used this to work out which UK city would offer the quickest commute.

Someone driving through Leeds could expect to make their way across the city at an average of 24.23 mph, the fastest speed of any of the cities studied. Bristol comes in at a close second, with an average of 23.55 mph through the city.

In comparison, a motorist will only travel at an average of 13.54 mph in Edinburgh, and just 8 mph during the morning rush hour. Meanwhile, a London commuter drives at an average of 11.34 mph.

For those unfortunate enough to be driving through the city centre at 8 am, it is Manchester that records the slowest average speed, at just 1.25 mph. That’s about a third of the average person’s walking speed!

Safety first

The Oponeo study also considered safety. It considered how many traffic accidents there are per 1,000 inhabitants in each of the 12 cities included in the research.

Belfast saw the highest incidence of accidents, with 4.06 per every 1000 inhabitants. Conversely though, it also had the lowest percentage of fatal accidents out of all 12 cities.

At the other end of the scale is Manchester, which had only 1 accident for every 1,000 inhabitants . So perhaps there is an up side to those average 8 am speeds of 1.25 mph!

Glasgow tops the table

Taking all of these aspects into consideration, Glasgow comes out on top as the UK’s most car friendly location. The city is a cost effective, safe, and commuter friendly city to live and drive in.

Were you surprised by these findings? How important is car friendliness to you when it comes to the place that you live? Share your thoughts by leaving a comment below.