INSIGHT: Vantastic day? Not if you're buying insurance
By Simon Hacker | 6th February 2024
The humble van - that crucial workhorse for thousands of small businesses and traders across Gloucestershire - is becoming not so humble when it comes to the cost of keeping it on the road.
And the latest price spike for small businesses isn't fuel and maintenance: it's insurance.
New figures show that the average quoted price of van insurance rose by a staggering 35.9% last year (in the 12 months to December 2023), signalling the highest annual increase for more than six years.
And when you track back a decade, when market analysts Consumer Intelligence (CI) began collating annual data, the average quoted van insurance premium has nearly trebled. Since April 2014, it's soared by 192.4%.
Today's CI Van Insurance Price Index shows that in December, van drivers most commonly received new business quotes in the £500 and £749 and £750 and £999 brackets.
Laura Vas, Senior Insight Analyst at CI said: "As we have seen in the motor market, the rising costs of claims in relation to the increased price of sourcing replacement vehicle parts and completing repairs has pushed van insurance premiums higher this year."
While the report notes some easing in the latest quarter's movements, given inflation's slower rise, she added: "premiums for the younger end of the market remain considerably higher than the quotes for those more experienced drivers."
The only previous higher annual increase in quoted premiums came in the third quarter of 2017, but there are signs of a slowdown in the pace of increases.
Quoted premiums for van insurance rose 4% in the three months to the end of December 2023, CI says, which was significantly lower than the 12.9% rise in the three months to September, and the 9.8% increase in the three months to June.
The report added: "Quoted van insurance premiums are being pushed higher by the rising cost of claims, which is being driven in turn by the cost of sourcing replacement parts and carrying out repairs.
And while younger drivers might be expected to be taking the brunt of high quotes, applicants under 25 saw the lowest increases in quoted premiums at 24.5%. In contrast,
Drivers aged over 50 were quoted 41.6% more, with drivers between 25 and 39 seeing a hike of 36.6%.
Despite this, CI noted that nearly 42% of over-50s van drivers could source a quote for less than £500 compared with 15% of those aged 25 to 49. It added: "No under-25s can do so."
CI is also noting a change in the way that van drivers use their vehicles - but if you're using the van for a break, you'll pay more again: "Owners using vans for social, domestic and pleasure saw increases in quoted premiums of 37.6% while tradespeople experienced rises of 35.3% in 2023."
New data released today from the Society of Motor Manufacturers and Traders shows that new van registration volumes rose 8.4% to 23,962 units, making it the best January for three years, as the UK market grows for a 13th consecutive month.
Within this data, electric van uptake jumped 19.4% to 1,186 registrations, with more than 60,000 joining UK roads since 2018. But the SMMT warned that green uptake must grow faster, as Zero Emission Vehicle Mandate requires BEVs to represent 10% of sales this year. The key handbrake to this being the need for a big rise in van-suitable public chargepoints.
Mike Hawes, SMMT Chief Executive, said: "More than a year of growth shows the importance of vans to Britain's economy, and surpassing 60,000 electric vans is a crucial step in our net zero journey. Industry is ready to deliver a mass market transition but buyer demand must increase massively, requiring everyone to play their part. Ramping up dedicated public van charging infrastructure in particular is essential for all UK businesses to be confident of making the switch, sooner rather than later."
Copyright 2024 Moose Partnership Ltd. All rights reserved. Reproduction of any content is strictly forbidden without prior permission.