Monday 5 December 2016

Insurance cost a dark cloud on the horizon

Cover aside, there shouldn't be too much gloom out there

Published 13/11/2016 | 02:30

Economist Jim Power Photo: Steve Humphreys
Economist Jim Power Photo: Steve Humphreys

Just as the election day polls were opening on the Eastern seaboard of the United States - a day which would end with the unexpected victory of Donald Trump - economist Jim Power's report for the Society of the Irish Motor Industry and DoneDeal was being launched dealing with the first nine months of the year.

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Already Power's report was declaring that "the outlook for car sales is extremely uncertain" and that while "the auto industry is still performing strongly, there have been clear signs of deceleration in sales in recent months".

Looking to the end of the year, he said new car sales in 2016 should be close to 147,000 while a "very uncertain market due to Brexit effects" is on the way.

To Brexit, he can now add Trump, although in both cases I think their influence is being overstated. There is an overall slowdown in many markets. Yet there shouldn't be too much gloom out there, as I said last week, there are great opportunities to buy new and second-hand cars.

A lot of purchase plans have never been cheaper and as Power's report highlighted, the cost of a new car has decreased by 3.5pc since September 2015, while the cost of petrol is down 5pc and diesel is down 4.6pc in those 12 months.

However, the rather big fly in the ointment is that the price of motor insurance has increased 25.1pc since September 2015 and is up 68.7pc since September 2013. This is going to need strong Government action and soon. It's something that will make people angry and liable to break the law.

It's rarely I go out to car launches these days but I made an exception on the lunchtime the Trump win was being digested to see the new Hyundai Ioniq, the first car which will be available in electric, hybrid and plug-in hybrid form. It is a car which in looks, style, range, price and space will really put it up to the Toyota Prius and Nissan Leaf. It will be a strong part of the increasing move to hybrid and electric cars which at last is set to take off. As I will be driving it from next Tuesday, I'll keep any more comments until a proper report.

I also received details from Hyundai of the new i30 which will be in the showrooms by the end of the year. There's a lot of positive chatter about it especially with the 1.0 Turbo petrol engine which was in the i20 Active when I so enjoyed it recently. Prices start at €22k which is sharp for what is on offer.

However, this also means that the outgoing models should be going cheap. In fact, one UK website suggests that it is the best value discounted model out there at the moment. It's still a really excellent car, so push for a great deal.

The house favourite, the Hyundai i10 - which colleagues joke should receive the perpetual Sunday Independent Car of the Year trophy - is also being subtly refreshed with features including new lights and grille. The i10 is a car that really makes sense and will surprise people who have never tried a car in this sector.

It just shows how far Hyundai has come in the past few years that we are discussing three offerings without mentioning the company's Tuscon, the SUV which is the country's top-selling vehicle and the model which has put the marque in pole position to be first in car sales this year.

As I write this on Friday morning, I see many showrooms offering massive discounts on 162 cars. I was especially drawn to some juicy offers on Ford Focuses and Fiestas. Both of which deliver some of the best drives in the market.

A three-month-old, lowmileage Focus Style was down from €25,240 to a cappuccino under €20k, while the same low-mileage Fiesta was going for €13,242, saving €3,543 on its list price. And you don't have to pay p&p. These offers were with Fort Motors but I reckon the same will be available elsewhere.

Sunday Independent

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