What's the news?
With three years of double-digit growth in the Irish new car market behind us, new car sales have just hit their first post-recession speed bump - a 1.4 per cent fall in the number of cars being bought in September. According to figures released by the Society of the Irish Motor Industry, 4,698 new cars were sold in September 2016 compared to 4,766 in September 2015. It means that the rolling total of new car sales so far this year now stands at 143,205 compared to 120,961 at the same point last year.
Light commercial sales saw a small three per cent rise in September, while heavy goods vehicle sales were up by 16 per cent in the month.
The Hyundai Tuscon remains the best selling car of the year so far, but the Volkswagen Golf took the top spot in September.
So why has September 2016 seen a sudden halt to the seemingly inexorable rise of Irish new car sale? Back-to-school blues? Brexit worries? No, according to SIMI it's all down to the spiralling cost of insurance. Commenting on the figures SIMI Director General Alan Nolan said: "as an Industry which employs 42,000 people nationwide and collects in excess of €5 billion in Taxes for the State, what we need next week is a Budget that supports stability and lifts consumer confidence again. After several difficult years it is important that the Economy and our Industry do not see a downward trend after the progress of this year. Consumer and business confidence are crucial in driving economic activity so any negative decisions in the forthcoming Budget will directly impact on activity, on employment and on tax revenues in 2017.
"Despite the continuing reduction in the overall cost of motoring, the significant increase in the cost of motor insurance premiums for consumers and for businesses must now be a serious concern across all sectors. Since 2013 Motor Insurance Premiums have increased by 71.3% and in the past 12 months alone, increases have been running at 38.6%. With further significant increase in premiums predicted, this will continue to unfairly burden motorists and businesses, and is a particularly serious issue in the case of younger drivers and those on lower incomes. Our experience of previous periods of high insurances costs suggest that car maintenance will reduce, increasing the risk of accidents and the incidence of uninsured driving is also likely to increase. In the past when we had similar problems the establishment of the Motor Insurance Advisory Board (MIAB) and its recommendations (2003) delivered significant reductions and improved the level of transparency in relation to the factors contributing to insurance costs.
"SIMI is calling for the re-establishment of the MIAB as a matter of urgency. We commend the work of the recent Oireachtas Committee hearings and the current CCPC investigation. However immediate wider-ranging action is urgently needed. In this regard while we await the re-establishment (hopefully) of the MIAB, the Society also feels that the CPCC's Consumer section should undertake out a general review, from consumers' perspective, of motor insurance premiums seeking to highlight the issues, including underlying costs, which give rise to the current high level of motor insurance premiums and to make recommendations to the Minister in order to ameliorate the situation. Recent reviews of insurance costs in the UK, has seen their motor insurance premiums fall to levels that are now lower than three years ago."