Motor car insurance policyholders stay with current vehicles

According to recently released research findings from the Society of Motor Manufacturers and Traders, motor car insurance policy holders and vehicle owners are staying with their current vehicles longer than ever with car registrations dropping by 4.4 per cent to 1.94 million in 2011.

As drivers struggle to keep their cars on the road through high petrol prices and rocketing car insurance rates, this is not the first time registration figures have dipped below the two million mark recently.  The first instance of this drop was in 2009 at the height of the worldwide economic downturn, the SMMT said.

2011’s drop in demand was exacerbated by the car ‘scrappage’ scheme instituted by the government, as this caused a fleeting increase to registration numbers in 2010 as it subsidised the purchase of new cars.  Other cars not powered by petrol, such as diesel and electric cars, have increased their market share over the past 12 months as well, and the popularity of fleet cars has grown by 4.7 per cent with in excess of one million fleet vehicles registered.

John Lewis, the British Vehicle Rental and Leasing Association’s chief executive, stated that the past year has been a quite challenging one for the motor industry in the UK.  Thankfully, businesses purchasing new fleets accounted for 60 per cent of all new car sales, Mr Lewis added, and the discount car insurance industry has benefited from fleet insurance policies as well.

The 4.4 per cent drop in demand for 2011 was not nearly as bad as expected, according to the SMMT.  This is because the industry body had already made initial predictions of 1.92 million new registrations last year, according to Paul Everitt, chief executive for SMMT.

In an interview with the BBC, Mr Everitt echoed Mr Lewis’ sentiments by calling 2011 to be a challenging one for the motor sector.  2012’s trading conditions will remain tough, the SMMT chief added, as a result of weak economic growth.

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