The temporary car insurance market is a small sub-set of a much larger, global insurance industry. But the market share of temporary insurance companies is showing signs of a significant increase, as driver habits change and attitudes shift. The temporary car insurance market is set to wield more influence over the shape of the industry to come, and could herald new changes to car ownership. But what are the key drivers for growth in the temporary insurance market?
One of the key drivers for the uptick in investment in temporary car insurance, as opposed to conventional insurance plans, was heralded by the onset of the coronavirus pandemic in 2020. With the pandemic came government directives to work from home, and resulted in the widespread adoption of new working agreements for employees.
Today, 24% of the working population in the UK are party to hybrid working agreements, enabling them to work between their home and their office. As such, work-related transport is on the decline; less people are relying on their cars to get to work each day. With cars sitting on driveways for far longer than before, conventional insurance plans represent an unnecessary expense to many working adults. Temporary insurance offers flexibility – and a corresponding decrease in monthly expenditure.
Speaking of which, budget management is another strong factor in the gradual shift towards temporary insurance models. Conventional insurance plans can often be costly, especially for newer drivers and with respect to changing driving habits.
While there are ways to make a conventional insurance plan work, the ever-growing cost-of-living crisis has had a profound effect on the spending power of households across the country. With millions looking for ways to reduce their average outgoings, temporary insurance models offer a reprieve from high premiums.
Temporary insurance also works in tandem with household trends of reducing fuel usage. Driving a car has never been more expensive, and people have never been more incentivised to leave the car at home. With insurance costs, a car is expensive just sitting on the driveway, where temporary insurance frees motorists from the cost of their unused car.
Lastly, temporary car insurance plans offer unparalleled versatility in the insurance market. As younger generations drive less, but still drive for occasions and holidays, temporary insurance is a winning model for allowing drivers to insure themselves on a friend’s car for sharing driving responsibilities during a road trip.
The model is also much easier to access than conventional insurance, appealing to the younger Millennials more accustomed to the convenience of app technology and services like Deliveroo. In all, temporary car insurance’s popularity can be attributed to the convenience it brings to households and individual motorists, whether in reducing paperwork and costs attributed to running a car or in making holiday trips much simpler to plan.