Survey Shows Motorists Are Downsizing

A survey by LV= car insurance has revealed that almost one in five UK drivers (19 per cent) has downsized or sold one of their cars since the onset of the credit crunch in a bid to save money. The main reason given by motorists for downsizing their vehicle over the last eighteen months was to save money in fuel (61 per cent) while nearly a third (29 per cent) said they did it to cut the cost of road tax. Those who downsized their vehicle estimate they have already saved an average £309.

Despite the emphasis from the Government on ‘greener’ driving, only one in six (15 per cent) of those who had downsized cited environmental concerns as part of their decision.

Almost a quarter (23 per cent) of respondents to the survey said they would consider buying a second car to reduce their insurance premiums. LV= analysts recommend looking for a common make of car with a smaller engine as that will generally help to reduce insurance costs.

LV= also suggested several steps motorists should take in order to get the best value car insurance including shopping around and ensuring the driver has the right class of cover and is not paying for business or commuting use if they don’t require it.

With more UK motorists downsizing, or buying second hand instead of new cars, the effect on new car sales has been catastrophic, with sales of new cars falling by a third over the last year and 600 fewer vehicles a week being registered in November 2008 compared to the same time the year before. As a result, car production has slumped by a third over the last year and the Government is now considering extending state aid to the troubled motor industry.

John O’Roarke, Managing Director of LV= Car Insurance, said: “Buying a car is often the second biggest purchase people make after their house so it’s only natural that in the current economic downturn, when people are being more careful with their money, they also look to save on motoring costs.

“This is undoubtedly a smart move, as the credit crunch looks set to bite deeper. By following the guidelines above, motorists downsizing should be able to make significant savings every year without having to consider getting rid of their car altogether.”