How New Car Supply Chain Issues Affect The Industry

row of cars parked motor trade

Price of vehicles set to increase

The automotive industry has been struggling with supply chain disruptions for decades, and we are now facing the worst of the recession. New car prices have continued to rise as manufacturing companies struggle to acquire new components for their vehicles, and the rising cost of energy as well as the scarcity of skilled technicians have meant that the price of new vehicles have increased to allow manufacturing companies to make a profit. This has pushed drivers to turn to the second-hand car market to find cheaper alternatives, which has also started driving up the price for used cars as they become a more popular alternative.

This has a knock-on effect that has increased the price of courtesy vehicles and hire companies, as they struggle to keep up with the demand of people finding alternate solutions to the ever-increasing prices of the automotive industry. It doesn’t stop there either, as this also influences the price of garage services, and increase the likelihood of them running into delays due to the scarcity of car parts.

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, resulting in the industry becoming highly competitive as insurers started reducing their rates to obtain new business.

The cost of 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 any major covid-19 restrictions are unlikely to return.

How does this affect me when make a claim?

It’s possible that you may struggle to obtain a courtesy car thanks to the increase in car component costs. Insurance companies are looking to try and resolve some of these problems and increase the speed of resolving an insurance claim by offering new claims options. One example, is Markerstudy providing a ‘Cash Out’ solution to clients, allowing their clients to have more flexibility in their claims provides the client with the freedom to find a solution that meets their needs.

This is just the tip of the iceberg, as insurance companies are continually trailing new and innovative schemes to try and help customers deal manage their insurance claims in a way that doesn’t leave them feeling like they’re missing out.

If you have any questions or wish to make a claim yourself, please check our commercial claims page for more information: www.higos.co.uk/claims/commercial/

 

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

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