Car Insurance: October 2012

Tuesday, October 30, 2012

Two Tier Tax

The government is thinking about implementing a new â€˜two-tierâ€™ Vehicle Excise Duty policy which would mean that those using Motorways and A-roads would have to pay a higher tax than those using small roads.

A question of revenue

The current VED rates bring in around Â£6 billion a year. The government is concerned that the new breed of fuel efficient vehicles becoming increasingly popular is going to drive down road tax revenues. The current system taxes those fuel guzzlers and is based on the amount of carbon dioxide produced per kilometre. This is just one of a few options being entertained by ministers.

How?

The system would be implemented by using automatic number plate recognition cameras to look at peopleâ€™s number plates on motorways. These would be very much like the cameras used in congestion charging in London or bus lane cameras. The technology and infrastructure has already been developed by technology giant IBM and is in place to see such measures take effect soon.

Protest

Many notable motor companies, including motor insurance companies are concerned about what appears to be yet another attack on motorists. There is also a worry that there will be congestion on small but crucial roads, as well as the prospect of many travelling longer distances to avoid motorways thus creating more pollution. More congestion itself would also lead to more pollution due to idling engines as well as inefficient urban speeds.

Another option has been the introduction of privately controlled road tolls or a one-off sales tax on new cars. Ultimately, implementing such policies without considering every single possible impact would be foolhardy to say the least. What we can be sure of is that issues will spring up in the Treasuryâ€™s continuing quest to replenish its coffers post Credit Crunch and to balance the ever pessimistic budgets.

The new R8 V10 Plus

Audi has announced the release of its new R8 V10 Plus, promised to be the best R8 yet. The new model set to arrive in January and hereâ€™s whatâ€™s new.

Whatâ€™s new?

The main difference is that 2013 â€˜plusâ€™ model has all new S tronic transmission which is a first for the R8.. You can also expect an extra 25 horsepower, all-round LED lights as well as significant weight savings. The suspension is set up for a more racey edge, though not as much as the Nurburg R8 which has very tough suspension indeed.

The v10 plus however only comes as a coupe but its 550 bhp and 398 lb-ft of torque accelerates it from 0-60 mph in an astounding 3.5 seconds, up to 124 mph in 7.8 seconds all the way to an eventual top speed of 197mph. It also stops pretty quickly as it has ceramic brakes

The new S Tronic

This S tronic system replaces the old R tronic system and makes a huge difference for gear shifting, as the double clutches can flick between gears effortlessly. This means that you get better performance and a smoother more linear power curve through the rev range. The new S tronic system not only delivers better performance but also a slightly better fuel economy compared with the standard gearbox. It provides excellent traction delivering power to all four wheels and has launch control too.

Lightweight

The â€˜Plusâ€™ has visited weightwatchers recently thus losing 110 lb. The engineers managed to fabricate an aluminium frame weighing 40% less than a steel frame. On top of that, the â€˜Plusâ€™ has carbon fibre-reinforced polymer parts such as the bucket race seats, front splitter, side blades and the diffuser. It also has some tasty 19â€™ y-spoke wheels previously seen on the R8 GT as well as dark grille and exhaust outlet.

If youâ€™ve got Â£127,575 to spend, you can get yourself the â€˜Plusâ€™. Alternatively, if you want to join the R8 club and youâ€™re on a budget, youâ€™re looking at a cheaper and slightly more affordable Â£91,575 for the V8 coupe version. Motor insurance for the cheaper Audi R8 is also sure to be slightly less than the full fat V10 version!

[netcarshow]

Car Insurance premiums have fallen, for some

After several years of steep increases in car insurance quotes, we have seen a change this year. The first part of the year saw premiums flattening, with the latter half seeing such premiums falling. The cheapest policies fell by just under 3% when bought directly from insurers and by 1% when bought through comparison websites.

Still pricey, but getting better!

Although there has been a drop, policies bought directly from insurance companies are still 6% more expensive than a year ago. Policies bought via price comparison web sites also fell, by 1% to an average of Â£612. The AAâ€™s Simon Douglas said that premiums were being pressured by increasing competition from business, despite the actual claim cost increasing. He said that â€œCompetition is tough in the insurance market, forcing many companies to reduce premiums despite the fact that costs show little sign of abating,â€

New regulations

In December, there will be the introduction of new EU regulations which will not let insurers grant cheaper car insurance premiums to women drivers. The European Courts of Justice have ruled that doing so is illegal and is effectively discriminatory towards men. This cost will be transferred onto annuities too. Female drivers will see their premiums rising by around 25% with some predicting that the rise may be as much as 50%.

Clamping down on claims

From April next year, there will also be a ban on the sale of accident information onto claims management or law firms. Anyone suing for damages will also need to pay their lawyers a success fee from the compensation money. This will make following up claims more pricey.

However, new regulations are going to attempt to cut down on whiplash claims which are causing insurance premiums to rise so quickly. Most of these claims, it is believed, are fraudulent. Simon Douglas said that â€œWhiplash injury claims continue to pour in and under current legislation, they are difficult for insurers to reject, even if they think they may be fraudulent, because it is difficult to prove whether or not a claimant has suffered,â€

There are sure to be some interesting times ahead for car insurance premiums!

Are older cars better suited to crashes?

There has been some speculation that older cars are safer due to the heavier, more rigid chassis and heavier, more robust parts being used. Modern car manufacture is completely different to old methods of car construction and these days much lighter materials are used.

Truth of the Matter

Tests have shown however, that if you crash a 1959 Chevrolet versus a 2009 model, in a front offset crash, you see how far this is from the truth. The 1959 buckles badly, the cabin compartment being affected, whereas the seemingly more flimsy 2009 model is much less affected. Simply put, older car frames bend easily when a substantial force (the force of another car) is exerted upon them and they therefore do not have the energy absorption properties of modern cars.

Evolution

In Europe however, companies such as Mercedes have been practicing crash tests since the 30â€™s (the US only started in the 60â€™s). Mercedes and other European manufacturers had made significant progress in motor safety by the sixties, however even today, the difference between a car from the 2000â€™s and a car from the 90â€™s is quite stark.

Modern Cars

Safety features in modern cars include air bags and, less obviously, crumple zones. Crumple zones are designed to absorb the energy of an impact; as the car changes shape during a collision, the materials deform which actually increases the amount of time the person takes to come to a stop. This therefore reduces the acceleration and force on the person, which thus reduces the injuries caused and reduces the chance of serious injury too.

Furthermore, modern cars have ABS, traction control and a strong safety cage which strengthen the cabin in order to protect the driver and passengers in the event of the car rolling onto its roof and sides. Such features are all also taken into account when motor insurance companies are calculating what they will charge for a car insurance quote. The safer the car is deemed to be, the less risk there is associated to the driver, hence the lower the premium will be.

What is clear therefore is that car safety has moved on leaps and bounds. A lot of the new car technology and safety features can actually be linked to motorsport and, in particular the vast developments that have been made in Formula 1 over the years. Safety has been the number one priority in F1 since the early 90s and the death of Ayrton Senna in 1994. Crumple zones, for example, can be attributed to the developments in F1.

European Car Industry Hits Britain

Recently we reported how the British car industry had bucked the down trend and how car sales were up for the first time since the 2008 recession as were . This has been good news, however the European downturn, especially in Germany has sent reverberations through Britainâ€™s car manufacturing industry.

The British Situation

This September, 128,192 cars were made in the UK which is a 5.8% fall on the production figures from 2011 according to the Society of Motor Manufacturers and Traders. Last month, Commercial Vehicle production fell even more, dropping down 20% from the previous year. Engine production was down 13% from last year to just over 213,000 units.

The German problem

Much to blame for this has been the fall in car sales in Germany. Germany forms almost a quarter of European car sales but reported a drop of 11% in September compared with last September. This is despite many substantial discounts promoted by Mercedes and VW who hardly ever need to take such action.

Pre Reg Problem

In the UK a third of new cars sold are actually pre reg as they are substantially discounted. The practice which is common here but unusual in Germany, is shown to have become more popular there. If we take this into account, we can surmise that very few new cars are actually sold at list price, meaning that the figures are probably much worse than previously thought. Car insurance companies have nothing to worry about though, there are still as many drivers renewing, just a slightly ageing national fleet.

There have been suggestions to cut pre reg discounts and simply offer all cars at a discount as Nissan do with their new car. If all you are looking for is a quick buck, then maybe thatâ€™s the way. This sort of suggestion doesnâ€™t however tackle the more profound economic problems which so plague Europe and the West, economic problems which need time to be resolved ubiquitously.

Financing a New Car

Buying a car is an expensive business and finding the initial capital to purchase one can be problematic, especially if youâ€™re young and have just entered the job market. Today I will illustrate just some ways in which this wallet emptying task can be made a little easier.

Dealer Finance

Car dealerships try and thrust finance deals under our noses whenever possible, often demanding a monthly payment as well as an initial deposit. This makes the business of buying a car a whole lot more affordable short term, getting far more people on the car market. Last year, 65% of all new cars were bought using Â£19.8 billion in dealer finance. Dealerships tend to offer Personal Contract Purchases (PCPâ€™s) meaning that youâ€™ll pay a much lower monthly sum over several years (normally three) but at the end, provided that youâ€™ve adhered to the mileage limit, youâ€™ll have to pay a lump sum of several thousand pounds to retain the car. Many dealerships also offer combined car insurance payments making payments more manageable. Beware though as these may not be the cheapest.

Is there a better way?

PCP ends up however being expensive, and you never really own your car, youâ€™re renting it. You will probably find that you can get your car for cheaper if you take out a personal loan, but remember you will have to pay various arrangement and administration fees. Another option is incorporating the cost in your mortgage. Increasing your mortgage could well mean that youâ€™re getting the funds at a far reduced rate and wonâ€™t be paying those extra few thousand pounds to â€˜rentâ€™ your car. On both these options youâ€™d always be able to sell your car should circumstances change, making the whole business a lot more flexible.

What car?

Invest in something you will be able to afford. Donâ€™t go to the dealership and be mesmerized by all the extras. No doubt the salesman will ask if you want leather trim, better alloys, cruise control and all sorts of other gadgets which will be difficult to resist in the heat of the moment. Remember though that a base model advertised for Â£15,000 can soon become Â£25,000 if you succumb to all these tasty offers. Also, such options are generally the profit makers and you are paying far more than you should be. They donâ€™t generally add much second-hand value either. Consider buying a recent used car with a few thousand miles on the clock. Youâ€™ll save yourself a lot of money and wonâ€™t suffer the initial â€˜drive-out-of-garageâ€™ depreciation that a new car does.

Skoda Superb, lives up to its name

It has been a great year for British sport and in particular the cycling. Whether itâ€™s the Wiggins supremacy over the Tour de France and Olympics, or Sir Chris Hoyâ€™s outstanding Olympic performance, this little island should be justly proud. One surprising emergent however was the Skoda Superb.

Workhorse

Skoda, who sponsored the Tour de France, also supplied a number of Superbs to be used as team support vehicles. They really proved their worth, being used as a cycle team Headquaters, with those radioing the riders as well as taking calls from journalists outside. It is used as a wardrobe, to carry spare bikes, spare equipment and so on. Many constabularies use the Superb as a patrol car too, as it has a spacious rear where you can store anything from canines to convicts.

The Spec

With the basic coming at just under Â£18,000 youâ€™re getting a bargain. Itâ€™s got a 1.4 litre 125bp engine and a top speed of 125mph â€" not huge but its enough for a comfortable cruise. With so much space, you could easily fit four large people and a lot of luggage on a long journey. Although so big, unlike other estates which donâ€™t drive very well at all, is a good drive and has solid handling. You feel in touch with the road beneath. If youâ€™re looking for something more beefy, you can go all the way to the 3.6 litre v6 version which has 4Ã—4 and 260 horsepower to play with. It only costs Â£30,000 which is still great value for money.

Economical

The Superb is a diesel, and as such its very economical. Weâ€™re talking 57mpg for the basic model and its still got plenty of torque down low. It is also reliable and built on the same vehicle platform as the VW Passat which means that spare parts will be cheap and easy to get hold of. With fuel prices, road tax and motor insurance premiums rising, the Skoda Superb is a bargain which cannot be missed, and a bargain which shouldnâ€™t be expensive to service.

The Friday Five â€“ Top Hot Hatches

The term â€˜hot hatchâ€™ gained widespread use through the 1980s thanks to the influx of high performance hatchbacks from the late 70s onwards, beginning with the VW Golf GT and the Renault 5 Alpine in the 70s. This week, though, the Friday Five this week focuses on hot hatches that are available to buy now!

5. Mini Cooper

Coming in at 5th place this week is the Mini Cooper. The Mini Cooper has been a long standing favourite in the UK, not only because pre-BMW it was symbolic of being the ultimate British run-around, but also because the new Mini has incorporated so many lovable features that helped make it such a success the first time round. Itâ€™s a good looking, easy to drive, fun hatchback and the fact that it has the name â€˜Cooperâ€™ attached makes it hot!

4. Ford Focus ST

The Focus ST is another great hot hatch with a 2.0 litre turbo under the bonnet that produces 247bhp, which is a substantial amount of power from something so small. This allows it to hit 60mph in just 6.2 seconds and compete with cars twice the price. The ST is one of the more expensive options in this list, however.

3. Volkswagen Golf GTi

The Golf GTi, seen by many as the original hot hatch, simply had to feature. The Golf GTi has, over a number of years, been thought of as something that has grown further and further away from what it was originally intended to be, however, the last two models have firmly re-established the GTi at the top of the hot hatch market. They, of course, are incredibly popular too with a large number of motor insurance quotes have been purchased on such models.

2. Renault Clio RS

The Clio RS sits in 2nd place this week thanks to its all-round appeal. Itâ€™s one of the cheapest hot hatches on the market, yet one of the best too, pound for pound. With a beefy 2.0 litre engine that develops 200bhp, the Clio RS is no slouch, despite it being a pretty heavy car. Itâ€™s advantage though over the competition is its ability to take corners. The Clio RS was built in the old Alpine factory in Dieppe and rather than just putting a large engine in an everyday car, the Clio RS has been designed with performance in mind, ground up.

1. Ford Focus RS

The Focus RS is our number 1 hot hatch this week. The Focus RS comes with a 300bhp engine which will get the car from 0-60mph in less than 6 seconds and will go onto to 163mph. It also handles well and is capable of being an everyday run-around and a track day powerhouse.

But then again, all these hot hatches are capable of that!

Whatâ€™s your favourite?

Electric Cars Toxic?

A group of scientists in Norway recently pulled together an academic paper suggesting that electric cars are in fact much worse for the environment than we thought. Coinciding nicely with the decision by Toyota to remove their electric car from production last week for reasons of practicality, this study questions whether electric vehicles are in fact at all environmentally friendly. We already know that they save on costs, such as fuel, road tax, motor insurance quotes and congestion charges. However, are electric vehicles really worth while?

The inconvenient truth

The paper that they have compiled contests what we have always thought as a â€˜cleanâ€™ method of personal transport. One of the authors, Guillaume Majeau-Bettez outlines a problem which he calls â€˜problem shiftingâ€™. In other words, are we simply shifting the fossil fuel problem away? Are we conveniently not taking into account other factors which are more polluting in the manufacture process of such electric vehicles?

Toxic

The paper looks at how toxic the manufacturing process for producing electric cars is, compared to normal cars as well as taking into account where the electricity produced for such electric cars comes from. They claim that the potential for global warming during electric car production is twice that of conventional cars. The paper also states that it is counter productive to use electric cars in regions where electricity is produced by fossil fuel power stations. In fact it has been suggested that were al cars electric, the overall demand for electricity would increase from 15 to 30%

To conclude

The academics in Norway have emphasized the importance of an overall â€œsharpened policy focus with regards to life cycle managementâ€ thus countering â€œpotential setbacks in terms of water pollution and toxicity.â€ All these issues must be tackled before we can expect to see any real environmental benefits. In an age where we are increasingly concerned about the environment and our Planetâ€™s health, it is important not to rest all of our hopes on one concept, just for the sake of convenience. This study has shed a little light on the wider ranging issues around the holy grail of carbon-free transport.

Car manufacturers increase car component sharing

Earlier this year at the Geneva motor show, we saw VW announce how Audiâ€™s new A3 will be the platform for around 40 â€" 60 car models in the VW group. VW group which encompasses 11 different car and truck brands emphasized the importance of the A3 and how it will be crucial to the carmakerâ€™s future success. This week however, there have been talks between other manufacturers.

Modularity

Car manufacturers have been sharing car parts for decades, the first platform being created in the 1960â€²s. Car platforms now cover numerous component aspects but originally, the car platform referred specifically to a shared chassis only. GM for example used the same platform for the development of the Pontiac LeMans, Oldsmobile Cutlass, Chevrolet Chevelle and Buick Skylark in 60â€™s. Renault and Nissan, although autonomous manufacturers have been extensively sharing and manufacturing mutually beneficial components for the last 13 years since Carlos Ghosn became CEO of both companies at the same time. Other manufacturer conglomerates all have their own respective car platforms

Sharing is caring

Recently, efforts to modularize parts have increased substantially. Renault-Nissan has announced it is now joining forces with Daimler AG to create a close partnership and with an announced increase in modular parts from 200,000 to 1.6 million, you may well see many more shared components between the Mercedes A Class, a Renault Megane and a Nissan Juke for instance. BMW and Toyota has also reached a mutual agreement, with BMW supplying engines to some Toyota cars and Toyota is helping BMW develop some petrol-hybrid vehicles. Toyota is also keen to learn from BMW with respect to how to make their cars more â€˜excitingâ€™ and â€˜funâ€™ to drive. PSA Peugeot Citroen are also planning an alliance with GM, in the hope of boosting suffering European markets.

The benefits for us?

The advantages of such modularity have been numerous, including reducing development costs, global standardization, ease of repair, increased product variety as well as better quality. This should in translate into more affordable and more reliable cars, thus saving costs on repairs and in theory your motor insurance premium. Whether there will be any real choice left in the car industry is quite another matter however.

US go small on cars

The USA has always had a reputation for larger than life, petrol thirsty cars whether 4Ã—4â€™s, muscle cars or SUVâ€™s.. the bigger the better. It seems however that this trend is changing, with the US motor industry reporting a significant increase in small car sales. Sales of small cares in fact rose a huge 70% in a year.

Downsizing

Bob Shanks , Fordâ€™s CFO and Mary Barra, VP for GM both said that that this trend in Americans buying smaller cars was permanent. Ford, having experienced its best sales figures of small cars for 10 years sold 73% more than this month last year. GM reported a 97% increase in sales from September last year and Crysler reported a 51% increase.

Change in lifestyle

This is a change in the US lifestyle, particularly with a move towards more urbanized living, this reduction in large cars for a more practical replacement is expected to increase. The trend could also be explained by rising fuel prices, however some predict that small car sales will falter if fuel prices go down, or when the consumer wallet has acclimatized to more expensive fuel. After all fuel seems to be the main barrier to owning a large vehicle as road taxes and motor insurance premiums are very low compared with the UK and other EU countries.

Change negligible?

Cryslerâ€™s VP, Mr. Ranieri however stated that these sales figures were not significant and only due to the fact that previous sales of small cars have been so small.. they only make up 21% of US cars whereas SUVâ€™s make up 25%.

Some sceptics believe that the â€˜bigger is betterâ€™ philosophy is deeply engrained into the American psyche and thus the foremost barrier to the proliferation of small cars. Indeed although this may well be the case, it is important to take into account Americaâ€™s vast scale and the cultural differences that exist between city and country. Persuading rural southern communities to switch to smaller cars could prove fruitless for marketers. Certainly, if we see the fuel-guzzling car as the symbol of a Republican America, the latest sales trends should prove a good omen for Obama and the Democrats in the upcoming election.

Ooh la la! Hot-hatches at the Paris Motor Show

Yeah sure, thereâ€™s the McLaren P1 and other exotica at the Paris Motor Show but youâ€™re not likely to see any on the road, let alone get a car insurance quote on them. Youâ€™re probably more likely to see the new range of hatches, and what weâ€™re interested in are the new hot-hatches â€" the Peugeot 208 GTI, Clio RS, Mini JCW GP and Golf GTI concept.

The Clio Renaultsport

The Clio, released in a sumptuous sunflower yellow has received a comprehensive facelift , cosmetically, as well as the replacement of the 2 litre naturally aspirated engine with a 1.6 turbo. The power remains the same with torque increasing to 177lb ft and power delivery improved throughout the rev range. The manual gearbox has been replaced with an automatic dual-clutch transmission which may well be a cause for concern to many. At any rate they should be on sale for around Â£18,000.

The Peugeot GTI

The new 208 GTI, with a turbo charged 1.6 litre engine should renew the legendary status of Peugeotâ€™s 205 GTI of the 80â€™s. Its engine should deliver 200bhp which, with a kerb weight of just 1160kg should see this little car transform into a bit of a rocket. Aside from cosmetic changes, itâ€™s wider than the standard 208, suspension has been firmed up and anti-roll bars put in place. We can expect to see these in dealerships next year priced around the Â£20,000 mark.

The Mini JCW

The Mini S John Cooper Works is the limited edition Mini of which only 200 are to be released in Britain. Changes from the original include better brakes, adjustable suspension and new alloys. The 1.6 litre engine receives a total overhaul and its weight is reduced substantially, the cylinder block being now made of milled aluminium and produces 115bhp. Why all the cars have been painted in a battleship grey colour however is anyoneâ€™s guess.

The Golf GTI concept

Although apparently a concept model, the GTI looks ready for production. With the two variants producing 217bhp and 227bhp respectively, reduction in weight and more efficient engine, we can not only expect a better performing car, but also a more efficient one with a predicted mpg of 47. This is one tastefully styled vehicle and you can expect to be able to pick one up for around Â£25,000.

Going Turbo

With increasing petrol prices, environmental concerns and calls for better engine effiency, we have started to see the disappearance of the naturally aspirated engine in favour of forced induction alternatives. In the past, the turbo was a sure way to gain extra power. Some manufacturers installed turbos on cars which did not have enough space to fit a bigger engine, others, to make fast machines. The trouble was however, that such forced induction had many flaws, such as turbo-lag meaning that the required torque and power did not arrive immediately meaning a less than sharp response.

Turbo vs. Naturally Aspirated

Most car manufacturers found that it was better to improve and upgrade technology on naturally aspirated engines; with Honda introducing its variable cam profile VTEC to improve engine response at higher revs; BMW developing its Valvetronic variable valve timing technology as well as some manufacturers simply using larger naturally aspirated engines. Direct fuel injection has also been a major leap forward, replacing the now archaic carburettor.

No more lag

Advances in turbo engines meant that lag was becoming a thing of the past. Mitsubishiâ€™s inlet bypass method, igniting petrol down the exhaust manifold to keep the turbo running (when the throttle was closed) was one of the first systems. This was however only used in rally cars as it was extremely polluting and would not be acceptable on the road. Aside from this many turbo systems remained the preserve of the enthusiast.

Newer systems include multi turbos; a small and larger turbo configured to one engine, the small turbo to run at low revs and large to boost to high revs. The same configuration can be achieved with a supercharger and turbo charger. Now however the emphasis has been placed upon variable geometry turbo chargers. These have vanes which change angle according to the boost in order to deliver instant torque across a set of revs.

Fuel economy

New advances in turbo technology have meant that this has become the obvious choice for car manufacturers who wish to produce more fuel efficient, smaller engines but with the same torque and power as their non-turbo bigger brothers. All the recent advances in naturally aspirated engines have transferred to turbo engines, which means that you get the best of both. You wonâ€™t hear yourself though as turbos muffle exhausts considerably. Manufacturers have attempted to rectify this however, with synthetic exhaust notes being passed through the speakers.. nice.

Say goodbye to cylinders

The BMW M5 engine has dropped from a naturally aspirated v10 to a twin turbo v8. Americaâ€™s favourite pickup truck, the Ford F150 has had its v8 replaced with a v6 turbo. Fordâ€™s inline 4 engines are being replaced with three cylinder turbo charged variants. The new Renault Clio base model now has a tiny 0.9 litre triple. Car manufacturers are looking to create smaller and more efficient engines in any way possible.

The bottom line is, turbos give us more performance and better economy, meaning that naturally aspirated engines may well have had their day. You can expect with a small turbo, to see your road tax, fuel costs and car insurance costs to be reduced substantially.