The 2012 van insurance conundrum – 2

[…] further possible implications of the LEZ on van insurance.

Business owners – mainly sole-traders whose focus is purely in and around the heart of the city – are flooding the second hand auction sites to buy 3-5 year-old vans, which are more in line with the revised EU emission regulations (Euro III). For van insurers, older models, as is the advice generally given to apprentices and start-up entrepreneurs looking for cheap van insurance for young drivers, attract a more competitive van insurance quote. The brokers may well lose out there.

For larger corporations, who have historically purchased brand new fleets en masse as soon as they roll off the production line, they may be tempted to lease vehicles rather than fit filters to their new models. The charge for failing to comply within the LEZ is £100 per day, after all. If you are a courier firm and have ten vehicles servicing the Low Emission Zone, you may want to keep that possible £5,000 fine in reserve by hiring vehicles month on month rather than tie the capital up in new vehicles for the Capital, as it were.

The problem for van insurance companies in this latter scenario is that the van insurance premium is usually tied in with the monthly rental charge for the lease of the vehicle. Those corporate accounts, which have paid for many a broker’s Christmas party, may start to fall away rapidly, and someone has to pay for the champagne!

So, even on the back of this mini-surge in economic confidence, there still could be a sting in the tail when you come to search for your next cheap van insurance policy, only to find a nasty, large premium waiting in its place.

Before we even get to 2012, however, we’ve got December to tackle. For weeks, as we’ve reported on, insurance companies have been pleading with us to get our vans ready for another big freeze. If we have as prolonged a winter as 2010/11, van insurance premiums may rise just to cover the costs of excessive payouts, much like it did for the boiler industry in early 2011.

Furthermore, where are commercial vehicle insurance firms going to recoup the money from spare parts that may be lost, as van owners can now source their own in instances of breakdown and do not have to rely on the exact manufacturer’s part either direct or via an approved distributor?

Savings for van drivers in 2012 may come in the form of better use or type of fuel, as it seems all other factors are stacking against them.

Fuel efficiency has taken the average miles per gallon to 52.5 for new cars rolling off the production line, so it’s hoped vans can reproduce the same output. And electric-powered vans may tempt many, either zero-emission or hybrid; especially those driving around London’s LEZ. With Mercedes now up to production line capacity and Renault promising to bring the Kangoo model to market at half price to help bring realise their vision of 10% of cars on UK roads being powered thus within five years.

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