Will A Recession Affect The Rates Of Motor Trade Insurance Online?

The motor trade is resilient. Though if any business is truly recession proof then it has to be the insurance industry. Of course they lose money but rarely go out of business. Perhaps the only private industry to benefit from both death and taxes - on a par with Funeral Homes. The Motor trade on the other hand is a mixed bag. Can the rates of motor trade insurance online be affected by a recession?  Making comparisons between life insurance, assurance, home insurance and the car insurance industry against that of a multitude of different motor trade businesses is not easy. Yet in a recession these two are connected like conjoined twins. In a recession the first noticeable aspect is that prices are at all time highs. This goes for homes, vehicles, insurance premiums and stock market rallies. Until order books reduce, retail sales go on forever and stocks and shares tumble.

To understand why the rates of motor trade insurance might fall during a recession, it's important to know their business model. An insurance house invests its excess money in bonds and stocks. An insurer will lose money during a recession but its staple product of offering assurance and insurance is so vastly spread that their customer will always pay. Especially as crime is about to increase due to national poverty.

A Global Recession Sees The Motor Trade Staying Strong

Again the motor trade is resilient. When finances are more difficult the option of purchasing a high end vehicle with a loan, having lost a job, taken a wage decrease and perhaps inflation hit and the mortgage premium increased, is slim. Yet an MOT Centre, a mobile mechanic, their business is plodding along. If new cars are not being bought, then old cars are getting fixed. Yes in a recession people buy less and focus on need instead of want.  Furniture and household furnishing sales do decline, so it stands to reason that hauliers will have less contracts in that area. It's correct that truck drivers can lose their jobs, deliveries can lessen. On the upside of the downturn homeowners think about downsizing. Home removals requests increase, renters move to cheaper apartments requiring removals vans / trucks. The motor trade changes, of course car showrooms see less footfall but second hand car sales will see significant growth.

Antique cars are another boom sector during a recession. People who need to sell will and it becomes a buyer's market. If it takes a hobby mechanic with part time trader's insurance to renovate several vehicles, having purchased them cheap, several months to complete. When it comes to flipping the vehicle the country will be growing its economy and the investment in restoration will pay off two fold.

Eventually Motor Trade Insurance Has To Pass On The Discounts

How does this all relate to lower rates of motor trade insurance online during a recession? While the insurance companies are busy counting their stock market losses, the rest of the world is stemming back on purchases. Reducing their Fully Comprehensive motor trade insurance to third party fire and theft or simply third party. Eventually and this is historically accurate, the reactionary investment groups ensure that motor trade insurance monthly premiums begin to fall just as they did in 2010.  A competitive market is a healthy market. If motor trade businesses like car showrooms, hauliers, car valeters, mobile mechanics and MOT Centres are lessening their coverage, insurance houses have to provide attractive offers to those jumping ship. In the end the rates of motor insurance online will lower and be discounted. In a global recession most people are affected. The insurance industry also relies on a supply network Europe wide to enable parts replacement, breakdown recovery and servicing.

It takes time for all parts of the chain to begin price adjustment. While at the outset of recession people will notice the jobs being lost, it takes several months to a few years depending on how deep the downturn is, to see prices reflected across the board. Combined trader's insurance, fully comprehensive cover, windscreen insurance, replacement car and business premises insurance will usually lower by about 2% to 5%. In some motor trade areas margins are slim, if anything saves a business money it is more likely the fuel cost at the pumps but insurance premiums do fall too.



Please do not hesitate to get in contact with us through email, info@evansandlewis.co.uk or through phone call 01792 660590.