After a century of very little basic variation in the principles of the petrol combustion engine to power our vehicles, technological, mechanical and electrical innovations look set to change all that.
According to an article in Car Dealer magazine on the 8th of May 2017, vehicle finance brokers are predicting a slump in sales of petrol and diesel fuelled vehicles, in favour of alternative fuels.
Briefly, the survey of UK motor finance brokers found that:
- 29% of them forecast a fall in sales of diesel-powered vehicles – partly as the result of government’s current consideration of disincentives for operating what are seen as more highly-polluting vehicles;
- 19% forecast a fall in sales of petrol-fuelled vehicles;
- 77% forecast a growth in sales of electric vehicles and 81% a growth in sales of hybrid vehicles.
Furthermore, these trends are expected to become even more marked with the passage of time, so that in five years’ time:
- 52% said they expected sales of diesels to have decreased and a further 29% described that reduction as being significant – a total therefore, of 81% of the surveyed motor finance brokers;
- a further 52% forecast a fall in sales of petrol vehicles;
- at the same time, 91% said they expected an increase in the sale of electric vehicles, with 29% forecasting a moderate growth in the sales of hybrid vehicles and a further 62% expecting that growth to become significant.
Implications for motor trade insurance
Surveys such as this, of course, may reveal expected trends, although reality may be somewhat different. What seems quite certain, is that the face of the retail motor industry is likely to change considerably over the next few years.
This is likely to make it more important than ever that your business is protected by appropriate motor trader’s insurance and that the cover you have is adjusted and tailored to meet the changing profiles of the vehicles you handle.
This could possibly affect not only your motor trade road risk insurance, but many of the other elements typically incorporated in insurance for motor traders – such as cover for your business premises, public liability insurance, employer’s liability insurance (cover of at least £5 million is a legal requirement in many instances where staff are employed), personal accident, business disruption, and engineering inspections.
Motor trader’s insurance against defective workmanship
Significant changes in the types of vehicle being sold may also have a significant impact on a further element of your motor trader’s insurance – your liability for defective workmanship.
However well-trained your mechanics, salesmen and other employees, a flood of relatively unfamiliar and unknown vehicles may increase the risks of mistake and errors being made in the sale, repair or servicing of the vehicles coming into your business. Electric and hybrid vehicles, of course, pose quite different challenges to conventional petrol and diesel fuelled engines.
Insurance against allegations of defective workmanship which results from the mistakes and errors which might be made, may be a critical defence against substantial claims for compensation.