A Market Recovery For Car Insurance Companies?
Car insurance levels among young people are set to increase considerably over the coming year according to Sainsbury’s supermarket. The news comes after a number of years where car insurance demand has decreased among young people who have been putting off getting a car until the financial climate recovers.
Sainsbury’s predict a 49% increase in car insurance applications over the Christmas period and think this level of increase will be maintained for most of 2011. The predictions were made after looking at current trending and also increasing car purchasing figures, both in the second hand and new markets. One reason that Sainsbury’s suggested for the increase is the VAT rise that is due to be put in place soon. Young drivers on a budget especially are eager to purchase their policies before the VAT rise adds to the costs.
Following on from this study, some financial institutions are predicting a similar story to occur in the loans and credit market as more money is need for car purchases. This is not unbelievable as a similar situation has occurred in parts of South America and Mexico where rises in car insurance application, known as ‘aplique seguro de automovil’ have drive up the number of cash loan applications (prestamos en efectivo).
This upward trend has been taken as a very positive sign by many financial bodies as they are often an early indication of future improvements in other markets. It might be too early to break out the fireworks just yet however as similar claims were made only 6 months ago after consumer spending picked up and economy experts got a little over excited. However, after the increase failed to grow beyond very modest levels, most experts reevaluated their predictions and begun leaning towards a “double dip” recession model.
Regardless of the situation over the coming months, the advice is still to apply now for solicitar credito as the Mexicans say, as future increases in VAT are inevitable
Mail this post