June 23, 2020 by Greg Meckbach
Canada’s property and casualty insurance industry saw a steep drop this past April in the number of auto clients seeking policies for new vehicles, and it’s not clear how long a more recent rebound will last, the head of LowestRates.ca suggests.
“If someone wanted to buy a new car, it was far more difficult for them to do so because in most cases they could not actually go to the dealership during normal business hours, take a look at it, and do a test drive,” Justin Thouin, co-founder and CEO of LowestRates.ca, said of the widespread closures that started this past March after COVID-19 was declared a pandemic.
LowestRates.ca recently released data from its own site showing that this past April, the number of people seeking car insurance quotes for new 2019-21 model vehicles dropped by 80.08% compared to April last year.
“We believe our data reflects what many insurance companies saw in March and April, when car dealerships were closed and many Canadians were not able to purchase new vehicles,” Thouin told Canadian Underwriter.
“At the outset of the pandemic, people were very afraid. They were very afraid of leaving their house in general, but also very afraid of what [the lockdown] would mean to their finances – whether they would continue to have a job, whether they would be able to pay their mortgage, and whether they would be able to pay insurance and gas on their current vehicle. So buying new things, especially large purchases like vehicles, was probably at the bottom of individuals’ lists when the pandemic started.”
In May, the number of LowestRates.ca users seeking quotes for newer vehicles was up 51.07% over April. Those statistics are for consumers buying a brand new vehicle, not pre-owned vehicles.
Right now, it is difficult now to predict what the market for new insurance policies for new vehicles will look like going forward, suggests Thouin.
LowestRates.ca delivers sales leads to brokers and direct writers from people shopping online for home and auto insurance.
It is not certain right now whether fewer people will be able to buy new vehicles due to the economic result of the pandemic, Thouin said. “We are hearing currently that there is now a rebound in demand happening as purchases that were delayed in March, April and May are now being made. However, it’s unclear how sustainable that will be.”
Feature image via iStock.com/shaunl