Why It’s So Hard to Get Low-cost Car Insurance in Detroit

Seeking for low-cost automobile insurance in Detroit? You’re in for a tough ride.

Detroit’s typical annual vehicle insurance premium of $ 10,723 is the most pricey amongst big U.S. cities, according to a 2014 NerdWallet study. That is much more than double the average of the second-most-costly city, New Orleans, and much more than 10 instances the average of Winston-Salem, North Carolina, which has the lowest typical rates, the study discovered. 

Sadly for Detroit residents, exactly where you reside drastically impacts how significantly you spend for automobile insurance coverage. Higher crime rates, heavy traffic volume, a large number of uninsured motorists, Michigan’s no-fault insurance coverage program and insurance fraud are all variables contributing to Detroit’s sky-higher automobile insurance premiums.

Auto thefts and crime

There’s a purpose some have nicknamed Detroit “carjack city.” Detroit had 11,893 motor vehicle thefts in 2013, or 1,699 per 25,000 residents, according to the Federal Bureau of Investigation, far higher than the national average of 221 per 100,000.

Detroit is 1 of the most hazardous cities in America, with a violent crime price of 2,137 per 100,000 residents, 5 instances the national average, according to Forbes. The city has a house crime price of 59.58 per 1,000 residents, compared with Michigan’s rate of 23.28 and the national median of 27.3, according to information at Neighborhood Scout.

Larger prices of auto theft and home crime imply greater insurance prices, because motorists make claims to recover the charges of a stolen or broken car and the insurance coverage business has to pay out the claims.

Densely populated neighborhoods

Targeted traffic volume is another reason insurance coverage premiums are higher in Detroit than in the rest of Michigan. A densely populated area with much more cars generally puts motorists at a higher danger of obtaining into an accident.

No-fault insurance coverage

Michigan’s no-fault insurance law became effective in 1973. It needs motorists to carry no-fault auto insurance, which provides unlimited lifetime healthcare benefits for motorists suffering auto injuries and up to $ 5,392 per month in wage loss advantages for up to 3 years, regardless of who’s at fault in an accident. This indicates your premium rates can go up after an accident, even if you weren’t at fault.

Critics of no-fault insurance argue it has led to greater insurance premiums simply because of generous accident advantages and say it encourages risky and fraudulent behavior, according to the Insurance coverage Info Institute, an market trade group. Fraud seems to be an situation in Detroit. The city, with about 7% of the state’s population, accounted for a single-third of “questionable” insurance claims submitted for overview to the National Insurance Crime Bureau in 2012, the most current year reported.

On leading of no-fault insurance, drivers in Michigan are necessary by law to have personal injury protection, property protection and residual liability coverage, all of which add to the expenses of auto insurance.

How to decrease your premiums

The Detroit City Council has approved funding to study whether it would be feasible for the city to create its personal auto insurance coverage plan, which could give a lot more reasonably priced rates for city residents, according to Crain’s Detroit Business. It is a bold thought that has been met with mixed reactions, and if it is authorized, it could be years ahead of it’s implemented.

If you live in Detroit or face high automobile insurance coverage premiums for any other motives, here are 3 steps you can take now to lessen your costs:

1. Shop about. A 2013 NerdWallet study identified that American drivers on average are overpaying $ 368 per year for auto insurance coverage due to the fact they’re not comparing quotes. Using NerdWallet’s auto insurance coverage comparison tool tends to make it effortless to get a fast estimate on-line.

2. Get the discounts you deserve. Several insurance providers supply drivers a range of discounts, such as reduced premiums for completing a defensive driving course, student discounts for good grades, safe-driving-record discounts, military discounts and discounts for vehicles with specific safety attributes. Ask your insurance carrier about these potential offers. If they don’t provide any of these discounts, it may be time to switch providers.

3. Check your credit score. A higher credit score can mean more affordable auto insurance coverage premiums, so focus on paying your bills on time and paying down any debts. Verify out your credit reports to see whether blunders or errors may be hurting your score. You can get your credit report for cost-free from one particular or all of the national-credit reporting companies at AnnualCreditReport.com.

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Image by means of iStock.

Why It’s So Hard to Get Low-cost Car Insurance in Detroit

How an Agent Can Assist You Uncover Low-cost Car Insurance coverage

by Alice Holbrook on February 18, 2015 | posted in Car Insurance

For a lot of vehicle insurance purchasers, the possible savings presented by going straight to a provider such as Geico or Esurance are too excellent to pass up. These issuers say that their reduced expenditures let them sell consumers more affordable car insurance, typically saving them 15% or so. That may possibly be accurate in specific cases, but often agents can locate rates that are extremely competitive, especially for drivers who have specific scenarios.

Here are some of the occasions when it may make sense to use an insurance coverage agent:

You might not know what you want

Most agents perform not only with auto insurance coverage but also with home owners, life and other products. Independent agents represent several firms. An agent can assess what types of policies and coverage levels would be the ideal fit for you, including ones you may not have been thinking about. This might sound like a way for your agent to enhance commissions, but it is by no means a good notion to be underinsured. And acquiring a lot more than one variety of policy from the exact same provider — or “bundling” — will usually get you discounts on the plans you have.

You are busy

To be a wise consumer, you require to keep on best of your insurance coverage requirements. Acquiring a policy and automatically renewing it every year isn’t a good way to get adequate, low-cost car insurance. But if you’re juggling multiple policies in addition to the one particular for your vehicle, it’s time consuming to make positive you have the right coverage at the correct price tag. A very good agent can remind you when it’s suitable to drop your collision and comprehensive insurance or that your child qualifies for an “away at school” discount, saving you time and income. And if your policy is up for renewal, an agent can collect numerous quotes to ensure you are nevertheless receiving the best deal. An agent may even be able to get you a reduced price than you could uncover on your personal.

You have underwriting concerns

If there’s anything about you that would make an underwriter nervous — like a poor driving record — then getting insurance coverage by way of an agent might be your greatest bet. Agents can take into account extenuating circumstances and act as your advocate with the underwriter. They may also be in a position to suggest riders to cover uncommon risks.

Selecting the best agent

Of course, not everybody needs to purchase insurance coverage by way of an agent. If you have the time to study policies and adhere to up on quotes and claims your self, you may be satisfied managing your personal plans.

But if you do choose to perform with an agent, ask your buddies or family members for recommendations. Your state insurance department’s internet site ought to have a list of licensed agents and a record of any agent complaints. (You can discover your state insurance coverage web site by means of the National Association of Insurance Commissioners.) As soon as you’ve narrowed down your alternatives, take into account regardless of whether you have any specific insurance coverage wants — like coverage for an antique vehicle — your agent will require to address. Check no matter whether the agent represents far more than one insurer. Getting a wide choice of businesses will boost your odds of discovering low cost vehicle insurance coverage.

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Image by way of iStock. 

How an Agent Can Assist You Uncover Low-cost Car Insurance coverage

For Rideshare Drivers, Low-cost Vehicle Insurance coverage Can Be Difficult

If you are considering of turning your auto into a money machine with Uber or Lyft, you may be concerned that driving for a ridesharing business will make it tougher to discover cheap vehicle insurance. And you have explanation to be concerned.

The issue is that if you have ordinary private auto insurance coverage, your carrier can deny claims if an accident occurs whilst you are driving for a ridesharing firm like Uber or Lyft. The majority of private automobile insurance policies do not cover automobiles that are utilised for transporting passengers for a charge. Your policy can also be canceled if your insurer finds out you drive for a ridesharing firm and haven’t informed it that you are undertaking so.

But if you are sincere and tell your insurer about your new ridesharing employment, you may well be told you’ll need to have extra industrial driving insurance coverage. Complete industrial insurance coverage can cost up to 10 instances as much as less costly personal automobile insurance, according to Forbes. So several drivers have chosen basically to hide their ridesharing employment from their insurance firm and hope they do not get caught.

Uber, Lyft and comparable businesses such as Sidecar have moved to plug this insurance gap, occasionally beneath pressure from legislators. All 3 firms provide at least $ 1 million of coverage for drivers carrying passengers, though policies can differ for rideshare drivers who do not have passengers in the auto.

In general, if you have an accident among Lyft or Uber rides, you will need to file a claim with your provider very first — and have it denied — ahead of the ridesharing organization will step in. Limits can be comparatively low with high deductibles in these cases, and your insurer may possibly pick to cancel your policy based on your industrial driving.

Insurers commence to test rideshare coverage

Not all auto insurance carriers are completely against ridesharing. Some organizations have begun offering rideshare coverage for drivers in response to the developing recognition of apps like Uber and the require for additional insurance coverage.

Erie Insurance coverage was 1 of the initial insurance coverage firms to launch ridesharing coverage for drivers. The firm provides coverage in Illinois and Indiana, and coverage will be offered in other states based on the customer response, according to the firm. The plan expenses $ 9 to $ 15 per month and covers drivers until they are matched up with a passenger, and becomes secondary to Uber’s coverage once the app is turned on.

Metromile, an insurance coverage startup, not too long ago announced a program to offer by-the-mile insurance to Uber drivers in 3 states.

Geico is experimenting with a yearlong commercial insurance coverage policy in Virginia that insures rideshare drivers. The policy is in the early stages and may possibly soon be presented next in Maryland, according to BuzzFeed.

USAA is another insurer that is piloting auto insurance coverage for ridesharing drivers. The pilot program starts in February and launches in Colorado. The coverage will cost $ 6 to $ 8 much more per month, and it will extend into a member’s current auto policy coverage and deductibles, according to USAA. It will shield drivers from the moment their ridesharing app is turned on till they are matched with a passenger.

Any individual who drives for a ridesharing company requirements to be fully covered by personal vehicle insurance coverage, which is going to be the least expensive alternative for most individuals. The exact coverage will vary based on whether the driver has passengers, is on the way to a get in touch with or just waiting for work.

The ridesharing businesses and the insurance coverage sector are gradually catching up to the reality of the new driving economy, but people who are driving professionally, even casually, want to be aware of the potential gaps in their coverage.

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Image via iStock.

For Rideshare Drivers, Low-cost Vehicle Insurance coverage Can Be Difficult

Car-Weary? Here’s How to Get Low-cost Motorcycle Insurance coverage

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Car-Weary? Here’s How to Get Low-cost Motorcycle Insurance coverage

Survey finds Although Price Matters, Brand Reputation is Important for Low-Cost Vehicle Purchases

One in every 3 South African owners rated price as the most important purchase decision influencer, according to a recent study conducted by Ipsos. Price is followed by brand reputation, with roughly 16% of car owners placing great importance on the latter aspect.

This indicates that although price matters; vehicle quality, pre- and post-sales service (which contribute to brand reputation) are a key consideration for local automotive purchases; including lower-costing, ‘entry level’ buys. Adding to this, a review of official sales figures for the period October 2013 to March 2014 revealed that the more established, entry level automotive brands grew market share – of between 1% and 6%.  This is in contrast with lower-priced, new entrant brands which recorded losses in market share ranging between -1% and -4% during the same period.

It therefore appears that even for low cost vehicles, South African consumers prefer to buy a car with ‘good return’ in terms of durability, dependability and trade-in value. In some cases, opting for the lower priced, new entrant brand can come with draw backs, such as limited service and warranty plans. A few of the new entrants, low cost automotive suppliers offer 3 year / 45,000 km service plans as compared with the more established automotive brands that offer 5 year / 100,000 km service plans for new vehicle purchases ( and this includes their entry level models). Some of the new, lower-priced entrants are also much lighter on innovation and do not have boot lights, electric windows or radio.

According to Klaus Paur, Head of Ipsos’ Global Automotive, “consumers within recession-plagued and emerging markets look for the famous ‘value-for-money’ offer by demanding practical functionality while skipping on non-essential gadgets”.  To avoid negative image effects caused by these stripped down versions, some vehicle makers have an interest to protect the core marque, and launch their low cost offering under a different (budget) brand”

In South Africa, it would be a wise approach to follow for those leading automotive brands suffering a decline in sales volumes in their new entrant brands during the October 2013 to March 2014 period. With consumers prioritising quality, leading global suppliers have adopted an approach that has seen them manufacture market-entry level models that carry the car maker’s brand and are produced at quality standards similar to their higher level model ranges. Based on experiences in the developed world and other developing markets, the more established automotive suppliers are convinced that the adoption of this strategy is expected to deliver success within entry-level markets where price and brand reputation are the most important purchase decision influencers.

By James Maposa and Klaus Paur

Also view:

Vehicle Finance, Car Insurance and Road Safety

Buying and Selling a Vehicle – Informed decisions and the Vehicle Retailer

About Ipsos

Ipsos is an independent market research company controlled and managed by research professionals. Founded in France in 1975, Ipsos has grown into a worldwide research group with a strong presence in all key markets. Ipsos ranks third in the global research industry.

With offices in 86 countries, Ipsos delivers insightful expertise across 6 research specializations: advertising, customer loyalty, marketing, media, public affairs research, and survey management.

Ipsos researchers assess market potential and interpret market trends. They develop and build brands. They help clients build long-term relationships with their customers. They test advertising and study audience responses to various media and they measure public opinion around the globe.

Ipsos has been listed on the Paris Stock Exchange since 1999 and generated global revenues of €1,712,4 million (2 274 M$ ) in 2013.

Visit www.ipsos.co.za to learn more about Ipsos’ offerings and capabilities.

Survey finds Although Price Matters, Brand Reputation is Important for Low-Cost Vehicle Purchases

Survey finds Although Price Matters, Brand Reputation is Important for Low-Cost Vehicle Purchases

One in every 3 South African owners rated price as the most important purchase decision influencer, according to a recent study conducted by Ipsos. Price is followed by brand reputation, with roughly 16% of car owners placing great importance on the latter aspect.

This indicates that although price matters; vehicle quality, pre- and post-sales service (which contribute to brand reputation) are a key consideration for local automotive purchases; including lower-costing, ‘entry level’ buys. Adding to this, a review of official sales figures for the period October 2013 to March 2014 revealed that the more established, entry level automotive brands grew market share – of between 1% and 6%.  This is in contrast with lower-priced, new entrant brands which recorded losses in market share ranging between -1% and -4% during the same period.

It therefore appears that even for low cost vehicles, South African consumers prefer to buy a car with ‘good return’ in terms of durability, dependability and trade-in value. In some cases, opting for the lower priced, new entrant brand can come with draw backs, such as limited service and warranty plans. A few of the new entrants, low cost automotive suppliers offer 3 year / 45,000 km service plans as compared with the more established automotive brands that offer 5 year / 100,000 km service plans for new vehicle purchases ( and this includes their entry level models). Some of the new, lower-priced entrants are also much lighter on innovation and do not have boot lights, electric windows or radio.

According to Klaus Paur, Head of Ipsos’ Global Automotive, “consumers within recession-plagued and emerging markets look for the famous ‘value-for-money’ offer by demanding practical functionality while skipping on non-essential gadgets”.  To avoid negative image effects caused by these stripped down versions, some vehicle makers have an interest to protect the core marque, and launch their low cost offering under a different (budget) brand”

In South Africa, it would be a wise approach to follow for those leading automotive brands suffering a decline in sales volumes in their new entrant brands during the October 2013 to March 2014 period. With consumers prioritising quality, leading global suppliers have adopted an approach that has seen them manufacture market-entry level models that carry the car maker’s brand and are produced at quality standards similar to their higher level model ranges. Based on experiences in the developed world and other developing markets, the more established automotive suppliers are convinced that the adoption of this strategy is expected to deliver success within entry-level markets where price and brand reputation are the most important purchase decision influencers.

By James Maposa and Klaus Paur

Also view:

Vehicle Finance, Car Insurance and Road Safety

Buying and Selling a Vehicle – Informed decisions and the Vehicle Retailer

About Ipsos

Ipsos is an independent market research company controlled and managed by research professionals. Founded in France in 1975, Ipsos has grown into a worldwide research group with a strong presence in all key markets. Ipsos ranks third in the global research industry.

With offices in 86 countries, Ipsos delivers insightful expertise across 6 research specializations: advertising, customer loyalty, marketing, media, public affairs research, and survey management.

Ipsos researchers assess market potential and interpret market trends. They develop and build brands. They help clients build long-term relationships with their customers. They test advertising and study audience responses to various media and they measure public opinion around the globe.

Ipsos has been listed on the Paris Stock Exchange since 1999 and generated global revenues of €1,712,4 million (2 274 M$ ) in 2013.

Visit www.ipsos.co.za to learn more about Ipsos’ offerings and capabilities.

Survey finds Although Price Matters, Brand Reputation is Important for Low-Cost Vehicle Purchases

Survey finds Although Price Matters, Brand Reputation is Important for Low-Cost Vehicle Purchases

One in every 3 South African owners rated price as the most important purchase decision influencer, according to a recent study conducted by Ipsos. Price is followed by brand reputation, with roughly 16% of car owners placing great importance on the latter aspect.

This indicates that although price matters; vehicle quality, pre- and post-sales service (which contribute to brand reputation) are a key consideration for local automotive purchases; including lower-costing, ‘entry level’ buys. Adding to this, a review of official sales figures for the period October 2013 to March 2014 revealed that the more established, entry level automotive brands grew market share – of between 1% and 6%.  This is in contrast with lower-priced, new entrant brands which recorded losses in market share ranging between -1% and -4% during the same period.

It therefore appears that even for low cost vehicles, South African consumers prefer to buy a car with ‘good return’ in terms of durability, dependability and trade-in value. In some cases, opting for the lower priced, new entrant brand can come with draw backs, such as limited service and warranty plans. A few of the new entrants, low cost automotive suppliers offer 3 year / 45,000 km service plans as compared with the more established automotive brands that offer 5 year / 100,000 km service plans for new vehicle purchases ( and this includes their entry level models). Some of the new, lower-priced entrants are also much lighter on innovation and do not have boot lights, electric windows or radio.

According to Klaus Paur, Head of Ipsos’ Global Automotive, “consumers within recession-plagued and emerging markets look for the famous ‘value-for-money’ offer by demanding practical functionality while skipping on non-essential gadgets”.  To avoid negative image effects caused by these stripped down versions, some vehicle makers have an interest to protect the core marque, and launch their low cost offering under a different (budget) brand”

In South Africa, it would be a wise approach to follow for those leading automotive brands suffering a decline in sales volumes in their new entrant brands during the October 2013 to March 2014 period. With consumers prioritising quality, leading global suppliers have adopted an approach that has seen them manufacture market-entry level models that carry the car maker’s brand and are produced at quality standards similar to their higher level model ranges. Based on experiences in the developed world and other developing markets, the more established automotive suppliers are convinced that the adoption of this strategy is expected to deliver success within entry-level markets where price and brand reputation are the most important purchase decision influencers.

By James Maposa and Klaus Paur

Also view:

Vehicle Finance, Car Insurance and Road Safety

Buying and Selling a Vehicle – Informed decisions and the Vehicle Retailer

About Ipsos

Ipsos is an independent market research company controlled and managed by research professionals. Founded in France in 1975, Ipsos has grown into a worldwide research group with a strong presence in all key markets. Ipsos ranks third in the global research industry.

With offices in 86 countries, Ipsos delivers insightful expertise across 6 research specializations: advertising, customer loyalty, marketing, media, public affairs research, and survey management.

Ipsos researchers assess market potential and interpret market trends. They develop and build brands. They help clients build long-term relationships with their customers. They test advertising and study audience responses to various media and they measure public opinion around the globe.

Ipsos has been listed on the Paris Stock Exchange since 1999 and generated global revenues of €1,712,4 million (2 274 M$ ) in 2013.

Visit www.ipsos.co.za to learn more about Ipsos’ offerings and capabilities.

Survey finds Although Price Matters, Brand Reputation is Important for Low-Cost Vehicle Purchases

Survey finds Although Price Matters, Brand Reputation is Important for Low-Cost Vehicle Purchases

One in every 3 South African owners rated price as the most important purchase decision influencer, according to a recent study conducted by Ipsos. Price is followed by brand reputation, with roughly 16% of car owners placing great importance on the latter aspect.

This indicates that although price matters; vehicle quality, pre- and post-sales service (which contribute to brand reputation) are a key consideration for local automotive purchases; including lower-costing, ‘entry level’ buys. Adding to this, a review of official sales figures for the period October 2013 to March 2014 revealed that the more established, entry level automotive brands grew market share – of between 1% and 6%.  This is in contrast with lower-priced, new entrant brands which recorded losses in market share ranging between -1% and -4% during the same period.

It therefore appears that even for low cost vehicles, South African consumers prefer to buy a car with ‘good return’ in terms of durability, dependability and trade-in value. In some cases, opting for the lower priced, new entrant brand can come with draw backs, such as limited service and warranty plans. A few of the new entrants, low cost automotive suppliers offer 3 year / 45,000 km service plans as compared with the more established automotive brands that offer 5 year / 100,000 km service plans for new vehicle purchases ( and this includes their entry level models). Some of the new, lower-priced entrants are also much lighter on innovation and do not have boot lights, electric windows or radio.

According to Klaus Paur, Head of Ipsos’ Global Automotive, “consumers within recession-plagued and emerging markets look for the famous ‘value-for-money’ offer by demanding practical functionality while skipping on non-essential gadgets”.  To avoid negative image effects caused by these stripped down versions, some vehicle makers have an interest to protect the core marque, and launch their low cost offering under a different (budget) brand”

In South Africa, it would be a wise approach to follow for those leading automotive brands suffering a decline in sales volumes in their new entrant brands during the October 2013 to March 2014 period. With consumers prioritising quality, leading global suppliers have adopted an approach that has seen them manufacture market-entry level models that carry the car maker’s brand and are produced at quality standards similar to their higher level model ranges. Based on experiences in the developed world and other developing markets, the more established automotive suppliers are convinced that the adoption of this strategy is expected to deliver success within entry-level markets where price and brand reputation are the most important purchase decision influencers.

By James Maposa and Klaus Paur

Also view:

Vehicle Finance, Car Insurance and Road Safety

Buying and Selling a Vehicle – Informed decisions and the Vehicle Retailer

About Ipsos

Ipsos is an independent market research company controlled and managed by research professionals. Founded in France in 1975, Ipsos has grown into a worldwide research group with a strong presence in all key markets. Ipsos ranks third in the global research industry.

With offices in 86 countries, Ipsos delivers insightful expertise across 6 research specializations: advertising, customer loyalty, marketing, media, public affairs research, and survey management.

Ipsos researchers assess market potential and interpret market trends. They develop and build brands. They help clients build long-term relationships with their customers. They test advertising and study audience responses to various media and they measure public opinion around the globe.

Ipsos has been listed on the Paris Stock Exchange since 1999 and generated global revenues of €1,712,4 million (2 274 M$ ) in 2013.

Visit www.ipsos.co.za to learn more about Ipsos’ offerings and capabilities.

Survey finds Although Price Matters, Brand Reputation is Important for Low-Cost Vehicle Purchases

Survey finds Although Price Matters, Brand Reputation is Important for Low-Cost Vehicle Purchases

One in every 3 South African owners rated price as the most important purchase decision influencer, according to a recent study conducted by Ipsos. Price is followed by brand reputation, with roughly 16% of car owners placing great importance on the latter aspect.

This indicates that although price matters; vehicle quality, pre- and post-sales service (which contribute to brand reputation) are a key consideration for local automotive purchases; including lower-costing, ‘entry level’ buys. Adding to this, a review of official sales figures for the period October 2013 to March 2014 revealed that the more established, entry level automotive brands grew market share – of between 1% and 6%.  This is in contrast with lower-priced, new entrant brands which recorded losses in market share ranging between -1% and -4% during the same period.

It therefore appears that even for low cost vehicles, South African consumers prefer to buy a car with ‘good return’ in terms of durability, dependability and trade-in value. In some cases, opting for the lower priced, new entrant brand can come with draw backs, such as limited service and warranty plans. A few of the new entrants, low cost automotive suppliers offer 3 year / 45,000 km service plans as compared with the more established automotive brands that offer 5 year / 100,000 km service plans for new vehicle purchases ( and this includes their entry level models). Some of the new, lower-priced entrants are also much lighter on innovation and do not have boot lights, electric windows or radio.

According to Klaus Paur, Head of Ipsos’ Global Automotive, “consumers within recession-plagued and emerging markets look for the famous ‘value-for-money’ offer by demanding practical functionality while skipping on non-essential gadgets”.  To avoid negative image effects caused by these stripped down versions, some vehicle makers have an interest to protect the core marque, and launch their low cost offering under a different (budget) brand”

In South Africa, it would be a wise approach to follow for those leading automotive brands suffering a decline in sales volumes in their new entrant brands during the October 2013 to March 2014 period. With consumers prioritising quality, leading global suppliers have adopted an approach that has seen them manufacture market-entry level models that carry the car maker’s brand and are produced at quality standards similar to their higher level model ranges. Based on experiences in the developed world and other developing markets, the more established automotive suppliers are convinced that the adoption of this strategy is expected to deliver success within entry-level markets where price and brand reputation are the most important purchase decision influencers.

By James Maposa and Klaus Paur

Also view:

Vehicle Finance, Car Insurance and Road Safety

Buying and Selling a Vehicle – Informed decisions and the Vehicle Retailer

About Ipsos

Ipsos is an independent market research company controlled and managed by research professionals. Founded in France in 1975, Ipsos has grown into a worldwide research group with a strong presence in all key markets. Ipsos ranks third in the global research industry.

With offices in 86 countries, Ipsos delivers insightful expertise across 6 research specializations: advertising, customer loyalty, marketing, media, public affairs research, and survey management.

Ipsos researchers assess market potential and interpret market trends. They develop and build brands. They help clients build long-term relationships with their customers. They test advertising and study audience responses to various media and they measure public opinion around the globe.

Ipsos has been listed on the Paris Stock Exchange since 1999 and generated global revenues of €1,712,4 million (2 274 M$ ) in 2013.

Visit www.ipsos.co.za to learn more about Ipsos’ offerings and capabilities.

Survey finds Although Price Matters, Brand Reputation is Important for Low-Cost Vehicle Purchases

Survey finds Although Price Matters, Brand Reputation is Important for Low-Cost Vehicle Purchases

One in every 3 South African owners rated price as the most important purchase decision influencer, according to a recent study conducted by Ipsos. Price is followed by brand reputation, with roughly 16% of car owners placing great importance on the latter aspect.

This indicates that although price matters; vehicle quality, pre- and post-sales service (which contribute to brand reputation) are a key consideration for local automotive purchases; including lower-costing, ‘entry level’ buys. Adding to this, a review of official sales figures for the period October 2013 to March 2014 revealed that the more established, entry level automotive brands grew market share – of between 1% and 6%.  This is in contrast with lower-priced, new entrant brands which recorded losses in market share ranging between -1% and -4% during the same period.

It therefore appears that even for low cost vehicles, South African consumers prefer to buy a car with ‘good return’ in terms of durability, dependability and trade-in value. In some cases, opting for the lower priced, new entrant brand can come with draw backs, such as limited service and warranty plans. A few of the new entrants, low cost automotive suppliers offer 3 year / 45,000 km service plans as compared with the more established automotive brands that offer 5 year / 100,000 km service plans for new vehicle purchases ( and this includes their entry level models). Some of the new, lower-priced entrants are also much lighter on innovation and do not have boot lights, electric windows or radio.

According to Klaus Paur, Head of Ipsos’ Global Automotive, “consumers within recession-plagued and emerging markets look for the famous ‘value-for-money’ offer by demanding practical functionality while skipping on non-essential gadgets”.  To avoid negative image effects caused by these stripped down versions, some vehicle makers have an interest to protect the core marque, and launch their low cost offering under a different (budget) brand”

In South Africa, it would be a wise approach to follow for those leading automotive brands suffering a decline in sales volumes in their new entrant brands during the October 2013 to March 2014 period. With consumers prioritising quality, leading global suppliers have adopted an approach that has seen them manufacture market-entry level models that carry the car maker’s brand and are produced at quality standards similar to their higher level model ranges. Based on experiences in the developed world and other developing markets, the more established automotive suppliers are convinced that the adoption of this strategy is expected to deliver success within entry-level markets where price and brand reputation are the most important purchase decision influencers.

By James Maposa and Klaus Paur

Also view:

Vehicle Finance, Car Insurance and Road Safety

Buying and Selling a Vehicle – Informed decisions and the Vehicle Retailer

About Ipsos

Ipsos is an independent market research company controlled and managed by research professionals. Founded in France in 1975, Ipsos has grown into a worldwide research group with a strong presence in all key markets. Ipsos ranks third in the global research industry.

With offices in 86 countries, Ipsos delivers insightful expertise across 6 research specializations: advertising, customer loyalty, marketing, media, public affairs research, and survey management.

Ipsos researchers assess market potential and interpret market trends. They develop and build brands. They help clients build long-term relationships with their customers. They test advertising and study audience responses to various media and they measure public opinion around the globe.

Ipsos has been listed on the Paris Stock Exchange since 1999 and generated global revenues of €1,712,4 million (2 274 M$ ) in 2013.

Visit www.ipsos.co.za to learn more about Ipsos’ offerings and capabilities.

Survey finds Although Price Matters, Brand Reputation is Important for Low-Cost Vehicle Purchases