Economic booms and busts work in strange ways and the behaviour that results in reaction to an upturn is often exactly that which causes a downturn in the future. When things are going well, it’s our instinct to spend and not worry about money, just choosing to enjoy ourselves while we can. Exactly this overconsumption causes prices to rise too high, and the economy to overheat, eventually crashing. However, when things get tough we tend to be a little more careful with our spending and this can start to get things going again.
We’ve seen exactly this effect in the motorhome insurance market over the last year. Previously insurance was a subsidiary good; something you just need to get your motorhome on the road and to cover you in the event of damages. However, more and more consumers are seriously evaluating their motorhome insurance policies to make sure they’re getting a good deal.
When inflation is rising and money is getting tighter, every penny you spend is more and more important. Customers are looking to make small saving across the board on everyday utilities so they have more disposable income to spend on leisure time. Equally, customers are looking to make their money go further and get more features from their policies. European breakdown cover, for example, is a popular addition to a policy.
Customers are now starting to see the equation as a part of their working time. Though it may take an hour or so to sort out a policy, that saving can be thought of a wage saving. Making a £100 saving in an hour is most certainly worth taking the time to do!
The economic downturn isn’t necessarily making us more frugal, it’s making is think harder about what we spend and where we spend it. We’re making every penny count and we’re seeking to get more from the things we have to buy.