The decline in new and second-hand vehicle prices brought about a 7% decrease in policy premiums as of the end of November.
There has been a noticeable decrease in new and second-hand vehicle prices in the Turkish automotive market recently. The decline in prices causes significant changes in the motor insurance sector.
In addition to the regulations regarding second-hand prices, the increase in bank loan interest rates, the decrease in vehicle purchase-sale transactions and the decline in vehicle prices directly affected the decrease in car insurance and insurance premiums. While this situation offered cost advantages for vehicle owners, it also led insurance companies to revise their policy prices.
More advantageous options are offered to customers
According to information obtained from the Insurance Association of Turkiye (TSB), as of September, average car insurance policy premiums depending on automobile usage style reached their peak during the year. However, by the end of November, there was a 7% decrease in policy premiums due to the decrease in car prices. The decline in vehicle prices has allowed insurance companies to reduce compensation costs and therefore discount premiums.
In addition, the decrease in premiums provided access to more affordable insurance policies for consumers and also allowed customers to be offered more advantageous options.
One of the main reasons for the decrease was the stable course of exchange rates.
According to the information shared by TSB, one of the main reasons for the recent decrease in motor insurance and insurance fees was the stable course of exchange rates.
Exchange rates that remained stable for a long time allowed for the absence of currency fluctuations that affected the costs of insurance companies and therefore for premiums to be determined more stable. In addition, the fact that second-hand vehicle prices did not exceed the original vehicle prices, the mileage restrictions on second-hand sales, the contraction in vehicle loans, and especially the decrease in second-hand vehicle prices were also factors that supported this trend.
Provinces with the highest motor insurance rates
The decline in automobile prices also contributed to insurance companies keeping claim payments at a more sustainable level and therefore reducing premiums.
While decreasing insurance premiums provide cost savings to vehicle owners, they also enable more attractive policy options to be offered due to the trust effect it creates in the insurance industry. However, it is stated that in order to evaluate whether these trends are sustainable, other factors in the sector, especially risk elements such as the frequency and severity of traffic accidents, should also be taken into account.
According to TSB data, the city with the highest motor insurance rate is Istanbul, followed by Ankara and Kocaeli.
Source: Trthaber / Prepared by Irem Yildiz