Technological innovations are advancing rapidly while environmental concerns grow, shifting the way cars are manufactured, sold, repaired, driven and insured. Following extensive market research, we have rounded up the top five motoring industry trend predictions for 2024 here.
1. Electric Vehicles Will Dominate
The worldwide shift to electric vehicles (EVs) will continue apace, with Bloomberg New Energy Finance predicting EVs to account for 10% of all new car sales by 2025 and 58% by 2040. With several countries setting out to achieve net-zero emissions by 2050, it’s estimated that EVs will need to make up at least half of all new car sales by 2050. This will likely accelerate the adoption of EVs across various market segments, including commercial transportation – where efficient, eco-friendly options are in high demand. Initiatives like increasing battery efficiency (leading to extended driving ranges and faster charging times) and improving EV charging infrastructure will be required to facilitate the growth.
Matt Wood, Director of Data and Pricing, said: “With the shift to EVs, vehicle insurers will need to consider a huge variety of factors. The total value of the vehicle, details of the driver, plus other aspects such as the potential cost of repairs for the vehicle will all impact insurance premiums. Insurers will need to find the right balance between a fair price for comprehensive cover and not disincentivising consumers to choose an EV.”
2. Autonomous and Semi-Autonomous Vehicles Take Over
It’s estimated that by 2040 there will be 33 million autonomous (or self-driving) vehicles on the road, with the global autonomous vehicle market currently valued at $207.38 billion. Automakers like Tesla, Alphabet, Ford, and Volvo have all entered the autonomous vehicle space in recent years, and it’s expected to grow by roughly 10 times in the next 6 years. The integration of more sophisticated AI algorithms and machine learning models is expected to enhance the decision-making capabilities of autonomous vehicles, to not only improve safety features but also enable these vehicles to handle complex driving scenarios. But consumer and regulatory concerns represent a huge barrier to this growth – with 70% of respondents in a recent survey reporting they would be uncomfortable travelling in an autonomous vehicle with no human control. With public opinion of autonomous cars remaining divided, there’s still a way to go before the technology is adopted.
Chris Penfold, Director of Underwriting, said: “Advancements in the autonomous vehicle space have been incredible, but from an insurance perspective, there’s still a long way to go. It will be some time before self-driving cars are common on our roads, and insurers in the UK will be carefully planning the insurance implications that they bring whilst keeping a close eye on the global insurance market for such models. Aside from insurance, autonomous vehicles have a PR problem to overcome before they win the trust of the public…”
3. Connected Cars
Connected cars are vehicles with the ability to communicate with other software systems and collect data from their surroundings. With 5G and the Internet of Things continuing to grow, the number of connected cars on the road has risen significantly – with an estimated market value of approximately $103.24 billion. This number is expected to grow to $191.83 billion by 2028, driven by the adoption of 5G technologies and rapid advancements in edge computing, where data collection and processing occur in close proximity, meaning vehicles can gather and process data in real time. With Google and Ford announcing Team Upshift – their connected car partnership – and Apple planning to manufacture an autonomous Apple electric car in partnership with Kia, connected cars are well and truly on their way. In 2024 and beyond, cars will be more like mobile computers.
Phil Evans, Commercial Director, said: “Long gone are the days of scrabbling around the glovebox for your favourite CD – connected cars represent an utterly intuitive driving experience. Syncing your tech with your car and no longer struggling for signal will soon be the norm, whether you’re particularly tech-savvy or not. From an insurance perspective, ever-increasing amounts of valuable tech in cars could see prices start to increase, but equally having the potential to provide insurers with data about how well you drive could do the opposite…”
4. Vehicle Purchasing Moves Online
Over 90% of car buyers undertake online research before a transaction, with more and more sales taking place completely online. In this way, the internet is radically affecting every part of the car-buying process – and posing a real threat to the traditional car dealer business model, with 83% of car customers stating that they wish they could save time by shopping online. It’s also worth considering that oil prices are projected to rise in 2024, which means SUVs and other less fuel-efficient vehicles could be less expensive to purchase, as consumers will want to avoid buying a vehicle with a hefty fuel bill. This may make used hybrid models more affordable compared to other automobiles on the market. It’s also expected that existing electric cars will become more affordable as the technology becomes cheaper – with Ford, Nissan and Renault all lowering the price of their EVs already. Buyers should leverage online resources like car comparison tools, customer reviews and expert opinions to make the most informed decision before purchasing.
Graeme Stoker, Director of Marketing, said: “Whilst it’s an efficient approach to purchasing a car, consumers need to be mindful of sacrificing quality and peace of mind, to save time. From an insurance perspective, buyers need to make sure they’re aware of anything that could impact their insurance price when buying a car, such as any vehicle modifications, or where a model has expensive options fitted. It is more important than ever to properly do your research if you’re buying a car online or you could be in for a nasty (and expensive) shock.”
5. Luxury Car Market Growth
The majority of auto manufacturers have experienced challenges over recent years, but high-end luxury brands have experienced a great deal of success, with the luxury car market predicted to grow up to 14% compound annual growth rate (CAGR). Rolls-Royce, Bentley and Lamborghini have all seen record profits, whilst Tesla – a more affordable high-end brand – has seen registrations rise more than 65%.
Andy Moody, Founder and Managing Director, said: “Insuring high-end vehicles is an expensive business. With skyrocketing theft and increasing premiums, the cost of insuring a luxury car is becoming prohibitive for the vast majority of drivers… As the Insurance Times Personal Lines Broker of the Year 2023, we know first-hand that expensive, luxury vehicles can have some of the highest insurance premiums around, and increasing costs of repair are also impacting prices. Our advice is to borrow a friend’s car and temporarily insure it to get that luxury driving experience at an affordable cost.”
Whatever your plans for the upcoming year, get on the road in 2024 with our temporary car insurance – secure your quote in less than 90 seconds today.