Is the car in danger of becoming a luxury product?

From this month of July, new car models marketed in the EU must be included Speed ​​Smart Adapter. A new mandatory equipment, which has been added to the black box, also recently imposed. These technologies have weighed on insurance prices for at least ten years by increasing the price of cars. Should they turn the private car into a luxury product?

The rise in the price of the car fleet weighs on insurance prices

Our study of the increase in insurance premiums over the last ten years recently reported a 16% increase in car contributions between 2010 and 2020 (ie more than the general price inflation in the same period: 13.2%).

Two main reasons explain this increase: the cost of personal injury accidents, which increased by 5.7% since 2010, according to the French Insurance Federation. A tendency to continue as the numbers of traffic accidents after the decline in the number of injuries after Covid-19 have started to rise again since the beginning of the year, as explained in our latest study on the impact of inflation on insurance rates.

The second structural factor is increase in the car fleet. In fact, new cars coming out of the production line are increasingly equipped with expensive advanced technologies, especially electric and hybrid cars.

This trend has also been measured for a decade. The magazineArgus publishes each year the composite portrait of the average car. Taking inflation into account, it turns out that its price increased by 7,000 euros between 2010 and 2020 (from 19,767 euros to 26,789 euros).

But mechanically, cars that are more expensive to buy are also more expensive to repair, with parts that are harder to find, more expensive, and that require specific know-how … For insurance companies, this affects the premium: if they need more to cover repairs , they raise the premium to maintain their margin.


New equipment obligations

What is worrying is that this inflation in car prices may soon be exacerbated by two new equipment commitments. Since May, manufacturers have been required to integrate a black box into their new models. This accident recorder, modeled after those found in aircraft, should make it possible to better identify the causes of an accident; but it will also represent an additional cost which will affect the final price of the car.

This new safety equipment is one of many new equipment that the EU wants to introduce to reduce the number of road accidents. From this July, the new models marketed in the EU must meet a new obligation: to include one Speed ​​Smart Adapter (“IVA” Where “IS A”to “Intelligent Speed ​​Assist”).

This system analyzes in real time (via an intelligent camera or a GPS position) the maximum speed to be observed on the road taken by the motorist. If the latter exceeds this permitted speed, he will be alerted by a sound and / or a light. If he does not slow down, the system is able to reduce the force of the vehicle to reduce the speed and return to below the limit.

New restrictions that raise fears that with these increasingly sophisticated systems, the car will become a luxury product that is unaffordable for most households. This fears Yves Carra, spokesman for the Automobile Club Association, interviewed by Francetvinfo:

“We are indeed moving towards more and more sophisticated cars, which are therefore becoming more and more expensive. And that’s a real problem with purchasing power. The most traded used cars are over 10 years old. The car risks once again becoming what it was at the beginning of the 21st century, a luxury product. You have to be careful, because it is a society that gets too upset if you can not buy cars anymore. »

In addition to the insurance costs, this new equipment currently weighs well on the increase in car contributions. But in the long run, if they make it possible to reduce the number of accidents, they can gradually reduce them. But how many years will it take before premiums fall after years of rising?

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