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4 automotive trends of 2022: do they help or hurt your insurance rate?

Dec. 5, 2022
5 mins
driver waits looking at their phone by white ev while it charges

Deloitte recently released its 2022 Global Automotive Consumer Study. The survey, which was conducted in the fall of 2021, polled more than 26,000 consumers in 25 countries — including more than 1,000 Canadians — about their feelings on advanced vehicle technologies, purchase preferences, electric vehicles, and more.

Among them, four key automotive industry trends emerged for 2022:

  1. Willingness to pay for advanced technologies remains limited
  2. Interest in electric vehicles (EVs) is driven by lower running costs and better experience
  3. In-person purchase experiences are still preferred by many
  4. Personal vehicles continue to be the preferred mode of transportation

Some of these trends will hurt or help your auto insurance rate, while others have no impact on it at all.

1. Avoiding tech features

The report found that consumers are less likely to shell out for advanced technologies, including safety and connectivity features. While Canada-specific data wasn’t available on this trend, of the U.S.-based respondents surveyed, more than half (56%) said they would be unwilling to pay more than USD$500 for safety features. And 65% said they wouldn’t pay more than that for connectivity technology.

The way safety technologies affect your car insurance rate is somewhat counterintuitive. Tech-loaded vehicle parts, like bumpers with sensors or wing mirrors, are more expensive to repair and replace than their less sophisticated counterparts. These added expenses for insurance providers can result in increased premiums for drivers, even if the vehicle is technically safer than a basic model. In this case, less tech could mean a lower rate.

2. Interest in EVs remains high

Consumer interest in EVs remains high, with the report citing lower fuel costs and concern about climate change as the top two reasons for drivers looking to make the switch. Range anxiety and lack of public charging infrastructure are the biggest things holding people back.

Of those Canadians looking to purchase a vehicle in the next three years, 20% said they’d consider a hybrid electric, plug-in hybrid electric (11%), or battery electric vehicle (10%).

When it comes to how an electric vehicle affects your car insurance rate, it really depends. It’s not necessarily the fuel source that affects your premium, rather the cost of replacement parts. EV batteries can be expensive and require specialized service, so this may result in an increased premium. Some models (like Tesla) may hit a carrier’s high-value vehicle limit, meaning increased premiums for drivers. On the other hand, some insurance providers offer a “green vehicle discount,” so it’s worth shopping around and comparing auto insurance rates for electric vehicles.

3. In-person vehicle purchases preferred

Despite the fact that online vehicle sales are gaining traction, the report found that 84% of Canadians would still prefer to purchase a vehicle in person at an authorized dealership. Canadians cited wanting to see (83%) and test drive (67%) the vehicle as the main reasons why.

That’s compared to only 2% of Canadian respondents who want to acquire their next vehicle fully virtually, with 38% citing convenience as the top reason. The good news is that no matter how you choose to purchase your vehicle, it won’t have an impact on your car insurance rate. Even if you prefer to shop in person for a vehicle, you don't have to go in person to buy your insurance. You can easily do that online by comparing car insurance rates and discounts from dozens of providers in minutes

4. Personal vehicles are the preferred method of transportation 

According to the report, 79% of Canadians get around by using a personal vehicle. It also found that shared mobility services like ride-hailing and car sharing have been slow to return to their pre-pandemic pace of growth. Instead, people prefer using personal vehicles to meet their transportation requirements. More than half of respondents (54%) never use more than one method of transportation for a single trip.

When it comes to auto insurance, this is another opportunity for savings. When insuring a vehicle, personal use will be cheaper than commercial use. This is because you’re spending less time on the road each day, and therefore your exposure to risks, such as collisions, is lessened. Not to mention you’re not carrying around goods or people, so this decreases your liability. Commercial vehicles often come with specialized, costly-to-replace equipment, further increasing rates. Even if you use your vehicle for work sometimes — and that includes working for ride-sharing apps — your rate can be impacted. Speak with your provider to determine whether you need a personal or commercial policy.

With these important insights on the key auto trends of 2022, drivers can prioritize and better position themselves and their insurance coverage in the year to come.

Interested in creating content with RATESDOTCA? Reach us at email@rates.ca.

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Caitlin McCormack

Caitlin McCormack is a writer based in Toronto. Her work has appeared in MSN, Food Network, HuffPost, What to Expect, Today's Parent, and Mashable, among others. When she isn't writing, she's busy chasing after her two sons, testing out new recipes, and working on her century-old fixer-upper.

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