As South Africa’s automotive industry continues on the road to recovery, new data from comparison platform Hippo.co.za reveals an encouraging increase in the number of motorists looking at car insurance.
“The automotive industry is a key sector of the national economy, with vehicle retail alone contributing 2.1% to South Africa’s GDP,” says Hippo.co.za CEO Bradley Du Chenne. “Our data shows that 8% more consumers are asking about car insurance in Q1-Q3 2021 than for the same period in 2020. This includes asking for quotes and taking out insurance. That’s especially encouraging news given the ongoing economic crunch, and the fact that so many South Africans are still working from home and not using their cars nearly as much as they did in 2019.”
Between 1 January and 31 August 2021, Hippo.co.za provided 256 232 car insurance quotes to consumers. That’s an increase on the 237 871 quotes provided during the same period in 2020.
“We’ve also seen a remarkable increase in traffic, with more than three million sessions on the Hippo.co.za website from January through August 2021. This indicates that South Africans are looking to save money by comparing insurance quotes,” says Du Chenne. In fact, the website sessions for those eight months alone were significantly more than Hippo.co.za saw through the whole of 2020.
“This tells us two things,” explains Du Chenne. “One is that the car industry is having a better year in 2021 than it did in 2020, despite the mid-year riots and the ongoing lockdown conditions. Secondly, it shows that South Africans want value. They want to make smart choices by insuring their vehicles, but also want to save money by comparing insurance quotes side-by-side to get the best deal.”
According to the National Association of Automobile Manufacturers of South Africa (Naamsa), the new vehicle market continued its gradual recovery through September 2021, despite the knock-on effects of the July looting disruptions. Aggregate domestic new vehicle sales for September 2021 (43 130 units) reflected a 15.8% year-on-year increase on September 2020 (37 237 units), while the majority of September 2021’s sales (an estimated 35 684 units, or 82.7%) were dealer sales.
That’s consistent with a recent survey by BrandMapp, which focused on South Africans with a monthly household income of R10 000 or more. Of the 30 000 middle-class South Africans surveyed, 38% said that they expected to buy a new car within the next year. That’s more than the 31% who expected to start a new business, or the 28% who had plans to buy a house.
“New wheels is the single biggest aspiration we measure in BrandMapp, more so than starting a new business,” says BrandMapp director of storytelling, Brandon de Kock. “That’s because owning a car (especially a nice one!) is something of a membership card for the truly mobile middle class.”
BrandMapp’s data also found that 80% of survey respondents who are driving cars they originally bought new from a dealer are insured, compared with 70% of those driving used cars. “What’s more, the older you get, the more likely you are to make sure you’ve got car insurance,” says De Kock. “Obviously for the under-25s, there’s a lot of ‘on my parent’s insurance’ going on, but for the rest, there’s a clear continuum.”
“Perhaps that shows the wisdom of age,” comments Du Chenne. “What’s clear though, is that South Africans of all stripes are starting to buy cars again. And while they want to insure their new wheels, they really want to save money and get the best value on their insurance coverage. That’s a positive shift in consumer behaviour, and one we don’t see changing back any time soon.”