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The changes in the Motorhome Industry

The NCC (National Caravan Council) have reported big changes in the leisure vehicle market. As per the latest statistics, the sales of new motorhomes for 2017 (from the beginning of 2017 till the end of June) has increased by 14% compared to the same period last year.

To be precise; 13,162 new motorhomes were registered between the start of July 2016 and the end of June 2017 compared to 11,559 in the same period across the previous 12 months.  This is the first time in history that the sales of motorhomes in the UK has exceeded 13,000 in a 12-month period. This rise in sales is great news for insurance brokers as it opens more avenues to expand businesses.

Even though increasing demand for motorhomes benefits insurance brokers there are also some drawbacks that brokers should be aware of. For instance, this is a niche market and as such poses specific risks and benefits, all brokers need to work with motorhome insurance brokers who experts in the field and can offer advice and guidance on placing the business.

The increase in demand has created a large area of potential growth for brokers who have yet to explore this area of the leisure market and the increase of brokers working with motorhome specialist insurers is expected to continue to rise with the market for motorhomes.

As the summer has come to an end the demand for motorhomes and motorhome insurance will start to decline, however with the market being so lucrative right now brokers should still see opportunities during the winter months and be prepared for the season to begin in February – March.

You can keep expecting this growth as the European motorhome industry is trying its best to provide their customers with more state-of-the-art and trendy recreational vehicles that too at great prices. Also, the NCC states that, the younger generation are finding van conversions appealing. According to them a recent survey of UK dealerships shows that, around 20% of the dealers confirmed that they were seeing younger buyers purchasing motorhomes.

This means as insurance brokers you will have to widen your audience and manoeuvre your business strategies accordingly if you don’t want to miss out on this changing trend.

Change for Motorhome Owners – Air Quality Certificate in France

It is imperative for brokers to stay informed of changes effecting motorhome owners, Why? That’s quite simple, to create good brand image by either giving a head’s up or by answering your client’s queries promptly.

A recent such change is the air quality certificate in France.

As brokers, you could impress your customers by informing about the ‘Air Quality Certificate’ needed in Paris.

Here is some information on Air Quality Certificate:

 

The new Crit’Air system is used on high pollution days to prevent the worst polluting vehicles from driving in the affected cities. They’ve banned cars registered before 1996 (and vans registered before 1997) from entering the city between 8am and 8pm, Monday to Friday.

This law has been in effect since last year. However, the new regulations require vehicles to display a sticker that shows just how polluting it is, on a scale of one to five.

On days when smog is particularly bad, they can extend the ban too, for example, all vehicles with a ‘4’ or ‘5’ grade sticker (as these are the most pollutant).

Tourists and visitors are not exempted from this new law. It applies to the entire city of Paris, unless you’re simply passing through on the Paris Ring Road (Boulevard Périphérique) – as many Brits do when they head to the south of France.

 

Where can your Customers get an Air Quality Sticker?

You could inform your customers that they can get their Air Quality Sticker for their vehicle from the official website here.

Also, you could give a heads up regarding other websites that sell the stickers as these sites have been known to charge excessive administration costs.

At the official site, vehicle owners will pay just €4.80 while the others are charging up to €30.

Those who don’t have stickers are in danger of being fined up to £135. If your customers have ordered the stickers and are concerned about the progress then just remind them they can track their orders on the Government’s official Crit’Air website and always keep a copy of their order receipt.

 

How should your customers decide on the right Sticker?

A vehicle will be graded on a scale of one to five (five being the most pollutant), but there is an additional sticker for green vehicles that are 100% electric or hydrogen powered.

Your clients will have to see which of the following categories their vehicle fits into based on the European Emissions Standards that each road vehicle must adhere to.

The year of build of the vehicle and the emissions levels determines which level the vehicle falls into, and which certificate it will need while driving in France. (For example, if anyone drives a 2004 diesel vehicle, they’ll need a CRIT’AIR 4, Dark Red Sticker).

 

The below details the classification of the stickers:

image credit: https://www.certificat-air.gouv.fr/

 

  • CRIT’AIR (Green Sticker)

For green vehicles that are 100% electric of hydrogen powered.

  • CRIT’AIR 1 (Purple Sticker)

Plug-in hybrid cars and Euro 5 and 6 petrol models (registered from 1 January 2011).

  • CRIT’AIR 2 (Yellow Sticker)

Euro 4 petrol-powered cars (registered between 1 January 2006 to 31 December 2010) and Euro 5 and 6 diesel models (registered from 1 January 2011).

  • CRIT’AIR 3 (Orange Sticker)

Euro 2 and 3 petrol cars (registered from 1 January 1997 to 31 December 2005), Euro 4 diesel cars (registered between 1 January 2006 to 31 December 2010).

  • CRIT’AIR 4 (Dark Red Sticker)

Euro 3 diesel cars registered between 1 January 2001 and 31 December 2005.

  • CRIT’AIR 5 (Dark Blue Sticker)

Euro 2 diesels, registered from 1 January 1997 to 31 December 2000.

 

One last thing – as of July 1st 2017, vehicles with a category 5 sticker will also be banned from Paris between 8am and 8pm, Monday to Friday. Please visit the official website for more details.

Recent Change in Vehicle Tax could affect your customers

At VM Insurance we always keep a close eye on UK Vehicle tax rate-changes (which usually gets updated in www.gov.uk) to ensure we know exactly what is happening with motorhomes.

We have noticed the UK Government has begun rolling out new tax rates for certain vehicles – including some motorhomes.

It is useful for brokers who have customers that insure motorhomes with them to know how these changes could affect their customers. Vehicles that produce a higher amount of CO2 are to be charged more than those which are considered environmentally friendly.

Whilst ‘greener’ automobiles will benefit from relaxed rates.

Will the new tax affect the existing motorhome tax payer?

The answer here is probably not.

Only vehicles that were registered at the DVLA from April 1st 2017 are liable to pay these new tax rates.

So basically, unless someone buys a brand-new motorhome or are planning on buying one, then existing motorhome tax payer will continue to pay the same rate. In addition, it’s also worth pointing out that not all motorhomes are taxed this way.

They’re only included in this if they meet the following requirements:

  • It is in the M1SP category
  • Its CO2 emissions are on the ‘type approval certificate

The New Tax Rates

Here’s what you need to know:

The price your customers will pay on their first year of tax depends on the vehicle’s CO2 emissions.

CO2 emissions (g/km) Petrol (TC48) and diesel cars (TC49) Alternative fuel cars (TC59)
0 £0 £0
1 – 50 £10 £0
51 – 75 £25 £15
76 – 90 £100 £90
91 – 100 £120 £110
101 – 110 £140 £130
111 – 130 £160 £150
131 – 150 £200 £190
151 – 170 £500 £490
171 – 190 £800 £790
191 – 225 £1,200 £1,190
226 – 255 £1,700 £1,690
Over 255 £2,000 £1,990

 

And for the second year (and every year after that), it depends on the type of vehicle.

Type of Vehicle Amount Taxed
Petrol or Diesel £140
Alternative Fuel £130
Zero CO2 Emissions £0

 

 

Additional Costs for More Expensive Vehicles

Things get a little more expensive if the list price of a new vehicle (the RRP before any special offers or discounts) is more than £40,000.

After the initial year of paying tax based on CO2 emissions, motorhome owners must pay the ‘type of vehicle tax’ and an additional £310 per year for the next five years.

When those five years are up, you go back to just paying the standard rate (£140, £130, or £0, depending on vehicle type).

If you have any questions, or your customers express concern, then you can direct them to the Government’s official page for more information

How to tap into leisure vehicles business

motorhomes-and-sunset

Recent surveys have shown the British love of motorhomes has grown enormously.   With UK motorhome registrations increasing by 2016 we can certainly see how this industry is now reportedly worth £6 billion.  With an estimated 1 million leisure vehicles owned we know the market is a significant opportunity for brokers and insurers.

Leisure vehicle insurance has traditionally been considered difficult to place and therefore brokers have tended not to seek out this type of risk and on many occasions even turned it away.  The rise of aggregators and purchasing insurance online has seen even the niche markets available more readily.  In these changing times brokers are always looking for ways to compete against the major players and show the value of using a broker.  There are of course the obvious benefits including preferential rates and time saving however one that is often over looked is the importance of knowledge within niche.  Certainly within the leisure vehicle market never has it been truer that understanding your audience can provide an edge to those brokers who take the time to learn the market.

With an average of 90% of leisure vehicles owners being happy with their vehicle and over half intending to buy a new vehicle in the near future it is evident that the purchase affects quality of life. Leisure vehicles owners are widely known to consider their vehicles their pride and joy and take it’s care very seriously.  It can be easier to understand this market than many would think. So we have some top tips to help brokers.

1. People feel differently about their leisure vehicle than their car. A car is very much a mode of transport to most, whereas a motorhome, campervan or caravan is like a home away from home. It gives comfort and security and should be approached with the same level of care as someone’s home.

2. Know their potential interests. Most people use motorhomes as a way to experience new things, this may be traveling across Europe for 6 months or driving down to the Jurassic Coast for weekends.  Caravan owners may be more inclined to be regulars at a specific site while still having the freedom to change if they wish to.

3. Know their concerns. Motorhome owners will be worried about accidents and theft. Caravan owners may be more concerned with accidental damage and loss of use. Both will need good gas and explosion cover.

If something matters to you it is only natural you will want to protect it with someone you trust. These 3 points will help you as a broker understand leisure vehicle customers and therefore go a long way to helping secure their business. Even 1 or 2 cases a year can add to profit margins and help keep existing clients by meeting all their insurance needs.

 

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