Is the sharing economy putting the brakes on traditional car ownership?

The traditional notion of car ownership is under threat. Tech innovation, the sharing economy, and the soaring cost of running a vehicle are giving rise to a new age of driving. Increasingly, drivers are choosing to carpool, share vehicles or borrow from others when they need them. Attitudes are changing from absolute car ownership to a more flexible, fluid approach to driving. The car insurance industry needs to respond to this by becoming more flexible and cost-effective for drivers.

There is little doubt that the car industry is in flux. New car sales have fallen for eight consecutive months. We’ve also seen a record decline in teenagers learning how to drive. In the last ten years, the number of 17-year-olds taking lessons has fallen by 28 per cent, while there’s also been a 20 per cent drop in under-25s learning how to drive. It is thought the rising cost of running a car is likely to be playing a part in these trends.

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Indeed, car insurance costs have risen three times faster than wages since the turn of the century, and the average annual premium is up by more than 14% in the last year, according to industry data.