Author: Rosilynn Yoon
As we cruise through 2024, car ownership is shifting gears, influenced by economic, technological, and social factors. Let’s take a look at some of the current trends, and explore how companies with skin in the game could navigate this evolving terrain.
The True Costs of Owning a Car
Key Insight: Despite plateauing car prices, the costs of owning a car, like insurance and repairs, remain high.
Imagine car ownership as a bumpy road with potholes of high insurance premiums and repair costs. Even though car prices have dipped slightly—by about 2% from 2022—the journey remains expensive. Auto insurance rates increased by around 24% in 2023, and a further 7% rise is expected in 2024 in Washington State. The complexity of modern vehicles and external factors like weather catastrophes contribute to these rising costs.
Auto insurance rates rose 638% more than wages in 2023. And nearly 50% of car owners have taken action to reduce their insurance costs, or canceled coverage entirely. Knowing this human truth, how can companies support consumers?
Encouragement of Electric Vehicle (EV) Adoption
Key Insight: The push for EV adoption remains strong, supported by increasing incentives.
EVs have been the talk of the town. And they will be for a while. Owning one comes with perks beyond the sleek design. The push for EV adoption is fueled by federal tax breaks of up to $7,500. Depending on your state, you could get more–in addition to rebates that energy companies offer, and access to the HOV lane. Volkswagen is one of many car manufacturers that are making EVs more and more affordable. This is only the beginning for EV adoption.
Growth of Alternative Transportation Solutions
Key Insight: The global e-scooter and e-bike markets are booming, Plus, there’s a growing number of commuter options.
The dawn of a new day in transportation: e-scooters and e-bikes. What once was an occasional activity with friends, e-scooters might actually become your primary mode of transportation. The global e-scooter market and e-bike market are both projected to at least double in the next eight years. These alternatives are painting a new landscape where flexibility and eco-friendliness take the driver's seat.
Or instead, you might use Uber. Or Lyft, or Zipcar, or GetAround, Lime, Veo, Citibike, Maven, Turo–one of the growing number of commuter options.
Three ways companies can help consumers with car ownership
1. Supporting consumers beyond car loans.
Expand support beyond traditional car loans, and consider ways to mitigate rising maintenance and insurance costs. For instance:
2. Promoting EV Adoption
Develop specialized loan products for EVs–including long-term savings benefits, incentives for eco-friendly purchases, and financing options for home charging infrastructures.
3. Enhanced Customer Engagement
Enhance digital platforms to offer seamless online experiences for auto financing and insurance products. Implement AI-driven chatbots and personalized digital interfaces to improve customer engagement and streamline the application process.
Conclusion
With any new change, we’re met with challenges and opportunities. Embracing innovation, sustainability, and digital transformation will be key to staying relevant and meeting the evolving needs of consumers.