How New Car Supply Chain Issues Affect The Industry
Price of vehicles set to increase
The automotive industry has been struggling with supply chain disruptions for decades. In 2022, we are now facing the worst of the recession. New car prices have continued to rise as manufacturing companies struggle to acquire new parts for their vehicles. Combined with the rising cost of energy, plus the scarcity of skilled technicians has meant that the price of new vehicles has increased. This allows motors manufacturing companies to make a profit. It has also pushed drivers to turn to the second-hand car market to find cheaper alternatives. Which, in turn, has also started driving up the price for used cars as they become a more popular alternative. You may need to consider your business trade car insurance policy, to ensure you are adequately covered for second hand car sales.
This has increased the price of courtesy vehicles and hire companies, as they struggle to keep up with the demand. It doesn’t stop there either, as this also influences the price of garage services. The scarcity of car parts increases the likelihood of garages running into delays. If you run a company and need motor trade insurance for business interruption, get in touch with Higos.
How Covid-19 has impacted the industry and the rate of insurance
Covid-19 has changed the way many industries have operated over the past few years, but none quite as much as the automotive industry. Covid-19 restrictions provided a one-in-a-lifetime scenario. They resulted in the industry becoming highly competitive as insurers started reducing their motor insurance rates to obtain business.
The cost of commercial and personal motor insurance is projected to rise. The volatile motor market initially caused by Covid-19 restrictions caused rates to dip throughout 2020 and 2021. The industry has started to stabilise throughout 2022, as major Covid-19 restrictions are unlikely to return. This will also affect hire car company insurance and motor trade insurance. This is due to the increased risk of business interruption.
How does this affect me when make a claim?
It’s possible that you may struggle to find a courtesy car thanks to the increase in car component costs. Motor insurance companies are looking to resolve some of these problems and increase the speed of resolving a motor insurance claim by offering new claims options. For example, is Markerstudy providing a ‘Cash Out’ solution to clients. This allows their clients to have more flexibility in their claims and provides the client with the freedom to find a better solution for them.
This is just the start, as motor trade insurance companies are continually trialling new schemes. This is to help customers to manage their insurance claims in a way that doesn’t leave them feeling like they’re missing out.
If you have any questions regarding motor trade insurance or wish to make a claim yourself, please check our commercial claims page for more information. You can also get in touch with our team of motor trade insurance brokers by requesting a call back.
References:
- https://www.economist.com/business/2022/06/12/how-supply-chain-turmoil-is-remaking-the-car-industry
- https://www.bbc.co.uk/news/business-58993851
- https://www.ers.com/news/2022/ers-live-motor-premiums-in-2022
- https://www.markerstudy.com/brokers/news/2022/june/supply-chain-issues-affecting-the-motor-industry