In this latest Opinion piece, Alan Inskip, Tempcover CEO, looks at how lockdown is easing in the UK and drivers are still cautious about venturing out too far or commuting to work. Does the new normal mean more demand for PAYG, or temporary car insurance that’s truly flexible?
Following the announcement of the easing of lockdown restrictions across the UK, Tempcover surveyed more than 1,000 motorists aged 18-75, who hold a full or provisional UK driver’s licence or EU driver’s licence during the last two weeks of May 2020 in order to gain greater insight into post-lockdown driver trends and habits. Despite most having the freedom of unlimited travel, our findings revealed that UK motorists are still cautious of getting on the road more frequently.
For context, more than three quarters (76%) of our respondents indicated that they used their vehicle at least four times per week before lockdown. At the time of our survey that number had dropped by almost two thirds – to just 26%. And now, more than two months in, well over half (56%) of respondents said that they are still unlikely to change their short-term car usage, regardless of what the regulations are.
And caution towards public transport is unsurprisingly much higher, with almost nine in ten respondents (86%) admitting they are uncomfortable using public transport in the current climate. When broken down further, we found that just one in seven (14%) were comfortable using public transport, while 34% said they would only use it if they were unable to access their own private transport. The majority (52%) said that they would not feel comfortable using public transport until there is a coronavirus vaccine available.
So, we have established that although motorists are still cautious of using their vehicles as frequently as they did pre-lockdown, they would still choose a private vehicle above public transport to get out and about. And with as many as six in ten (62%) respondents admitting that their household finances have been negatively affected by the impact of coronavirus – almost one fifth (18%) have resorted to extreme measures like taking their car off the road to save on annual insurance costs.
Taking into account this combination of factors, a viable solution for many motorists during this uncertain period is temporary vehicle insurance – where motorists only pay for the cover as and when they need it. Over half (54%) of surveyed motorists acknowledged that temporary insurance could be of benefit to them, with 29% purchasing at least one policy and a further 29% considering purchasing a temporary vehicle policy during lockdown.
Bearing in mind that there are absolutely no additional charges incurred for stopping cover when your annual policy expires – the first step is not to panic and rush into an ill-informed decision like driving uninsured or declaring your vehicle SORN to achieve short-term financial relief.
Provided the vehicle is taxed, affordable cover can be taken for terms as short as just one hour, right up to 28 days, with policies confirmed within two minutes. This provides peace-of-mind to the millions of UK motorists, who are using their vehicles far more infrequently than usual, that they are still legally insured to drive but are not under pressure to commit to an annual policy.
Growing appetite for vehicle purchase
Car dealerships across the UK were finally able to reopen their physical sites to the public from 1 June 2020, and not a moment too soon, with almost one third (32%) of surveyed motorists considering purchasing a new or used vehicle. Not surprising considering the current sentiment towards public transport.
While this move is welcome news to many consumers that are looking to purchase a new or used vehicle, what are the implications for social distancing and risk of infection? The DVLA has already confirmed that prospective car buyers are able to conduct solo test drives with participating dealerships that have registered trade plates and the relevant test drive insurance in place.
That’s the test drive covered, but what about getting driveaway insurance cover once you’ve found the car of your dreams? To make the process even more seamless and contact-free, major national dealerships are utilising the latest advancement in InsurTech that offers fully-comprehensive fixed-price 5-day driveaway insurance policies that can be accessed by the customer following a few taps on a mobile phone.
This enables the customer to obtain a simple single-cost policy in just 90 seconds, compared to the industry standard of 20 minutes to an hour – by eliminating all lengthy paperwork and admin through simplified T&Cs and a user experience that is based on direct customer and dealer feedback. The result is more efficient stock clearance times and greater profitability for the dealers.
For the end customers, it takes the stress out of searching for annual insurance on the spot, and provides the driver with near instant cover so that they can immediately leave the forecourt with their new set of wheels, while giving them the opportunity to thoroughly research the best annual policy to suit their needs.
Temporary car insurance explained
Temporary car insurance is time limited cover that’s ideal for when people need to borrow a car, pick up a new vehicle or just share a long drive. Whenever someone needs to use a car that they’re not already insured to drive, temporary cover is the flexible and affordable option.
Unlike a standard annual policy, temporary car insurance gives the covered driver the same level of comprehensive insurance but for a duration that works specifically for them. It works in the same way that standard insurance does except there are no long-term contracts. Once the chosen policy duration time is over, it won’t automatically renew, the policy simply expires and that’s it done. The covered driver will receive a reminder when the policy is due to expire so they can quickly and easily purchase more short-term car cover if they need it.