Finally there’s something for supercar spotters to get excited about – after several pandemic-related production delays, filming is now underway on Sky TV documentary Spotting London’s Supercars. It’s hard to imagine what this show might have looked like in 2020 when, for long periods, there really weren’t many supercars on our roads.
At ERS we’re feeling optimistic about the future for a supercar market that has continued to dazzle and innovate in equal measure, particularly given that its core audience hasn’t been as badly affected financially as other car owners by the events of the past 12 months. Indeed, our own appetite for supercar risk remains strong, and we’re benefitting from owners that are finding themselves with more time to shop around for specialist motor insurance.
But despite their appeal to High Net Worth collectors and car enthusiasts, supercar sales were not wholly exempt from the impact of Covid-19 in 2020. And with Brexit now affecting the composition of global manufacturing supply chains, not to mention audience habits continuing to evolve in light of the ongoing pandemic, the market is facing an intriguing few months ahead.
The rise of flexible leasing supercars
Overall road usage fell off a cliff in 2020, and one of the major talking points right now is whether the enduring impact of the pandemic could be an end to daily commutes and a resurgence in driving for pleasure.
The working from home revolution is giving many people a chance to reclaim their work/life balance, with some employees even vacating the cities altogether in favour of idyllic country life. And what better way for a business leader to spend their newly discovered downtime than cruising around the countryside in a high-end automobile?
This trend could well cause supercars to soar in popularity , although in the near term we may also see some drivers deciding to dispense with their luxury wheels altogether until the economy stabilises.
This uncertainty might explain the rise of flexible leasing for supercars, with drivers opting for one month rolling contracts over outright purchases. For example, we’re now seeing Jaguar F-Types offered on a rolling lease, in addition to the usual high-end BMWs, Mercs and Land Rovers.
Flexible leasing is a model that safeguards against unexpected financial shocks and market volatility and could appeal to supercar owners who have a tendency to change their vehicles regularly, freshen things up and keep across the latest auto innovations. Not all insurers are willing to take on flexible leased supercars, but as our annual policies take into account vehicle changes, we’re able to consider them, so long as we’re clear on the vehicles involved and the nature of the leasing arrangement.
Will supply be able to keep up with demand?
UK dealerships are currently relying on video calls and click-and-collect sales to continue trading, not a model that lends itself particularly well to high-value car sales. While we’re all hopeful that these dealerships will be able to open their doors to supercar customers again in the coming months, there is still the distinct possibility that global supply chain disruption will limit their ability to get new vehicles into the showroom.
With average prices for new supercars already on the rise, the evidence suggests that this squeeze on supply is already happening, which is in turn causing second-hand supply to tighten, as regular new buyers are being forced to hang onto their existing models until the situation eases.
If the situation continues, we could well see second hand prices escalating quickly over the course of 2021, up until the point that some existing supercar owners cannot resist the possibility of cashing in.
Supporting brokers through uncertain times
When markets are changing fast and there’s no clarity on what’s going to happen next, it’s important to be prepared to react quickly. That’s why it’s useful to be a specialist motor-only insurance provider – there’s nothing to distract our attention, meaning that we’re able to respond to market movements more quickly than other insurers.
We’re in regular conversations with our broker partners across the country courtesy of our Regional Development Managers and Regional Trading Underwriters, helping us stay alert to changing supercar client needs and preferences , and unlike some of our competitors, we’ve stuck to our guns on pricing to provide certainty and consistency, and to create a sustainable trading environment.
And, despite the current challenges, there are a number of clear opportunities emerging for supercar brokers.
Firstly, we’re seeing growing instances of clients looking for policies that will cover all of their vehicles (i.e. everyday cars as well as supercars), something which sits comfortably within our flexible underwriting capabilities.
Secondly, there are many companies cutting back on their company car schemes, leaving executive employees needing to take out personal specialist insurance for their high-end vehicles. These drivers will actually be far better served by personal Prestige insurance than by a company policy. It’s a great chance to reach out to them and promote broader benefits – rapid and responsive service levels, a dedicated claims team, access to premium courtesy cars, and so much more.
Finally, while lengthy lockdowns and home-working stints may blur and distort our perceptions of time, it’s important that we all keep a close eye on policy renewals so that clients aren’t left rushing into 11th hour decisions once they realise they need to update their cover.
Whatever the next few months hold for the Supercar market, we’re going to support our broking partners every step of the way to help make this a successful year.
So, if you’d like to chat more about your clients’ Supercar insurance, Multi-car or Car Collection needs, please email prestige@ers.com or call 0333 241 2445.
