Insurance is a contentious point for motorists around the UK. Every year we seem to drive more safely, with accident statistics falling, but every year our insurance premiums seem to rise. Many are thus looking for alternatives.
Hiring a vehicle if you use personal transport infrequently could be a good way to try and avoid some of the costs of running a car, and many more are doing so.
But it appears the industry has become wise to this angle too, with rental costs rocketing due to, yes, increasing insurance prices for short-term loans.
Now, the cheapest car hire deal isn’t always the best as you’re often stung with expensive extras at the rental desk, including car hire excess insurance. Costing up to £20 per day in some cases, it basically protects you from paying the costly excess (usually between £750 and £2,000) if you have a bump. Often you can arrange your own cover at a reduced cost to overcome this.
But it’s the cost of the basic car hire insurance policy itself which is pushing up rental costs for drivers.
To see the extent of this, you only have to look at how much more private motorists are paying. In 2011, the average personal insurance premium rose by 15% to £971, according to industry data.
This inflated cost of protecting yourself against third party risks has occurred through spiralling personal injury claims. A decade ago, the largest part of insurance payouts was for car repairs, but now, around 50% of car insurance claims settled are for ‘damage’ to people, not parts.
This leads to knock-on effects for those looking to escape them by hiring a car rather than buying one: translate this to a business that needs to make money and personal injury claims resulting from genuine or even staged crashes in hire cars represents a big risk to the large rental companies.
Put simply, that’s why the cost of hiring a car is going up, because the outlay on insurance is going up, too.
There are ways around it, of course, but the fact is, car hire costs are only heading in one direction. It seems there is little escape from the cost of rising car insurance premiums…