Soldato
- Joined
- 4 Aug 2007
- Posts
- 22,022
- Location
- Wilds of suffolk
Re the insurance side
Always remember the only people who really know are the actuaries. They are the only people who see enough data in depth and can normalise it enough to see the real trends.
Which is fine if we worked in a world where the actuaries created the pricing models based on all the factors they identify as being relevant. (Ie the questions you are asked, plus the ones they dont)
BUT, the real profitability by sector, car type etc is far more charged insurance on the public perception than the true risks.
I always remember when I worked with them they responded to me (after laughing at my thoughts I understood) with that amongst the lowest risk were young (25-35) with high performance cars, vs some of the highest risk being middle age mondeo man (it was some years ago) with a wife and two kids.
It makes sense when you see the stats and think about it. Young, high performance car, into cars, spends money on whats necessary, wont be likely buying the cheapest ditch finders etc, vs usually cash strapped and potentially distracted middle age man with two kids fighting in the back.
Depreciation on Evs is not finalised yet. The ICE cars the market and eg leasers were very capable of pretty accurately predicting depreciation. Its often interesting to see the models within a range in eg Comcar, where there could be 10-15% difference in 3 year depreciation rate within the range.
Look at the price difference in quotes for ICE leases and they are usually quite tighly correlated, where as with EV there seems to be more of a spread with differing views into likely depreciation.
Evs they have less data and are not yet as advanced. Evs also have a faster change (development) trend so the new car will likely always depreciate a bit faster, since the improvement over a say 2 year old one will be more than equivalent ICE.
However depreciation in cars is all over the place right now. Evs went a couple of years with virtually no depreciation. Now they have corrected (probably too far IMO, we will see).
Right now ICE depreciation is low.
Its difficult since the market is changing, ICE vs EV, but also during Covid, Ev actually had a more robust supply chain than ICE. Since Ev was towards the top of the price list then generally the manufacturers were concentrating here when there were component supply issues, and not supplying the lower spec ICE.
Tesla particularly had a better supply chain and were less affected than many of the main legacy manufacturers.
So we are seeing that mismatch now. Many companies had to hold on to lease cars for longer so there was a dip in supply od decent ICE hitting the used market. Used ICE values are out of line with the historical model and its difficult to see why they will not correct over time.
Especially once we hit the point the government want to start to hit ICE with a harder stick as they have reduced the Ev carrots.
Always remember the only people who really know are the actuaries. They are the only people who see enough data in depth and can normalise it enough to see the real trends.
Which is fine if we worked in a world where the actuaries created the pricing models based on all the factors they identify as being relevant. (Ie the questions you are asked, plus the ones they dont)
BUT, the real profitability by sector, car type etc is far more charged insurance on the public perception than the true risks.
I always remember when I worked with them they responded to me (after laughing at my thoughts I understood) with that amongst the lowest risk were young (25-35) with high performance cars, vs some of the highest risk being middle age mondeo man (it was some years ago) with a wife and two kids.
It makes sense when you see the stats and think about it. Young, high performance car, into cars, spends money on whats necessary, wont be likely buying the cheapest ditch finders etc, vs usually cash strapped and potentially distracted middle age man with two kids fighting in the back.
Depreciation on Evs is not finalised yet. The ICE cars the market and eg leasers were very capable of pretty accurately predicting depreciation. Its often interesting to see the models within a range in eg Comcar, where there could be 10-15% difference in 3 year depreciation rate within the range.
Look at the price difference in quotes for ICE leases and they are usually quite tighly correlated, where as with EV there seems to be more of a spread with differing views into likely depreciation.
Evs they have less data and are not yet as advanced. Evs also have a faster change (development) trend so the new car will likely always depreciate a bit faster, since the improvement over a say 2 year old one will be more than equivalent ICE.
However depreciation in cars is all over the place right now. Evs went a couple of years with virtually no depreciation. Now they have corrected (probably too far IMO, we will see).
Right now ICE depreciation is low.
Its difficult since the market is changing, ICE vs EV, but also during Covid, Ev actually had a more robust supply chain than ICE. Since Ev was towards the top of the price list then generally the manufacturers were concentrating here when there were component supply issues, and not supplying the lower spec ICE.
Tesla particularly had a better supply chain and were less affected than many of the main legacy manufacturers.
So we are seeing that mismatch now. Many companies had to hold on to lease cars for longer so there was a dip in supply od decent ICE hitting the used market. Used ICE values are out of line with the historical model and its difficult to see why they will not correct over time.
Especially once we hit the point the government want to start to hit ICE with a harder stick as they have reduced the Ev carrots.
Last edited:
