Is inflation affecting how policyholders drive?
Insurers had predicted consumer driving habits would return to pre-pandemic levels during 2022, or 2023 at the latest, but inflation may be throwing a wrench in those forecasts, said a recent industry survey.
Almost half (48%) of Canadians have made changes to transportation choices because of inflation, found a RatesDotCa and BNN Bloomberg survey, conducted by Leger.
Of the 48% who plan to cost-save on their transportation, 35% said they’re trying to avoid unnecessary trips, while 6% said they’re putting off necessary vehicle repairs.
Related: How the recession will affect personal lines
This comes amid news that vehicle repair times are being delayed due to parts availabilities and repair backlogs. Those lags in repair times aren’t expected to improve during 2023 due to an ongoing repair technician labour shortage in Canada and the U.S.
Plus, putting off vehicle repairs isn’t often a sound decision, noted Daniel Ivans, RatesDotCa’s auto insurance expert in a blog post.
“In the short-term, consumers who do this may be able to reprioritize those funds. However, the long-term implications of avoiding necessary car repairs can often lead to additional and unexpected expenses related to or caused by that very issue, or overall mechanical breakdown.”
What’s more, the study found nearly one-in-five Canadians said they plan to change their work commute due to inflation.
A small number (5%) are asking employers for more remote workdays, and this finding is more prevalent among Canadians under 35 (11%), versus those between ages 35-54 (5%). And, a small number (4%) of respondents said they plan to, or already have, changed jobs to accommodate their need to work from home because of inflation.
Other ways respondents are ducking inflation include cycling/walking (5%), using public transit (3%) and carpooling.
Some respondents (6%) plan to or have already purchased an electric vehicle (EV) due to inflation.
But while operating costs for EVs may be cheaper than gasoline vehicles, policyholders might also see higher premiums because of EVs’ expensive, tech-savvy features, noted an October RatesDotCa study.
Feature image by iStock.com/KathrynHatashitaLee
