why isn't breakdown cover priced on risk?
Discussion
Shush.
FFS I've got a 20 year old MAzda I turboed myself and an k-series engined Elise. I like paying as little as Mrs Muppet does for her Civic.
Although as I'm much less likely to have a flat battery, or get stuck at the roadside with a puncture, or not be able to fix my own car, or be able to fix my car but not have any tools with me, maybe she's a bigger risk than I am. Especially as I have a spare car and access to a car trailer and a workshop full of tools.
FFS I've got a 20 year old MAzda I turboed myself and an k-series engined Elise. I like paying as little as Mrs Muppet does for her Civic.
Although as I'm much less likely to have a flat battery, or get stuck at the roadside with a puncture, or not be able to fix my own car, or be able to fix my car but not have any tools with me, maybe she's a bigger risk than I am. Especially as I have a spare car and access to a car trailer and a workshop full of tools.
FLASHG1981 said:
Why do companies charge a standard price for breakdown cover when a new Honda is much less likely to break down than a 15 year old Alfa Romeo. Surely it makes sense to price it on the likelihood of a claim like they do with car insurance.
Is it? The recovery services do plenty of business with warranty recoveries.I think several reasons:
1) The cover is often personal rather than linked to car, as stated above.
2) The actual difference in reliability between the best and worst modern models is very small (and there aren't enough old cars on the road to be worth worrying about).
3) The cost of collecting statistics on which to base the premium would probably just make cover more expensive for everyone.
1) The cover is often personal rather than linked to car, as stated above.
2) The actual difference in reliability between the best and worst modern models is very small (and there aren't enough old cars on the road to be worth worrying about).
3) The cost of collecting statistics on which to base the premium would probably just make cover more expensive for everyone.
Also, its usually in the terms and conditions for the providers that they will reserve the right to charge you if they feel that you are abusing the service. Not sure of the situation today, but it used to be that the AA would start to potentially charge you if you have the same car break down 4 times or more in one year. Its not a massive cost, but I seem to remember its significant to discourage you from deliberately running unreliable cars.
DaveH23 said:
10 Pence Short said:
Probably because people who buy Peugeots don't want to pay £25,000 a year for AA cover.
My Peugeot has been recovered 3 times in 6 years. Not bad for being 13 years old and 106,000 miles on the clock.
Breakdown cover through flux insurance.
DaveH23 said:
My Peugeot has been recovered 3 times in 6 years.
Not bad for being 13 years old and 106,000 miles on the clock.
LOL Not bad for being 13 years old and 106,000 miles on the clock.
you're not helping your case, A recovery, on average, every other year is NOT good but I guess you have lower expectations but that's just as well
Over the past 20 years I have had one callout (alarm, fixed there and then). My wife has never called out, my mum has never called out, my dad has never called out. Needless to say, none of them have Peugeots
Edited by Dracoro on Friday 31st August 12:08
Dracoro said:
DaveH23 said:
My Peugeot has been recovered 3 times in 6 years.
Not bad for being 13 years old and 106,000 miles on the clock.
LOL Not bad for being 13 years old and 106,000 miles on the clock.
you're not helping your case, A recovery every other year is NOT good but I guess you have lower expectations but that's just as well
And yet, 6 years later, I'm now looking at Renault Megane 250/265s...
FLASHG1981 said:
Why do companies charge a standard price for breakdown cover when a new Honda is much less likely to break down than a 15 year old Alfa Romeo. Surely it makes sense to price it on the likelihood of a claim like they do with car insurance.
My new Honda broke down more then my 20 year old lada.....One of the big drivers of not pushing the costs up for people is that breakdown assistance is not mandatory.
If the AA decided to charge you £500 a year because you had a battered old motor, you probably wouldn't bother and would just run the gauntlet and hope it didn't break down.
By not varying the price a great deal, they get more people to take out the cover and thus the cost of the premiums is shared across everybody that takes out cover. For every three customers who buy membership "because it's only £40 and it's peace of mind" they're covering the bloke who has a three wheeled Vauxhall Viva with an exhaust held on by cable ties and doors held shut with string through the locks.
Car insurance has long distorted from this model because it can throw the premium right at the higher risk drivers because they know you have no (legal) choice but to pay it and go about your business. The car insurers however, cunningly haven't bothered to lower anyone else's premium to reflect the fact we're not all being priced generally to pay for the teenage lunatics anymore.
ooh, that was a bit ranty
If the AA decided to charge you £500 a year because you had a battered old motor, you probably wouldn't bother and would just run the gauntlet and hope it didn't break down.
By not varying the price a great deal, they get more people to take out the cover and thus the cost of the premiums is shared across everybody that takes out cover. For every three customers who buy membership "because it's only £40 and it's peace of mind" they're covering the bloke who has a three wheeled Vauxhall Viva with an exhaust held on by cable ties and doors held shut with string through the locks.
Car insurance has long distorted from this model because it can throw the premium right at the higher risk drivers because they know you have no (legal) choice but to pay it and go about your business. The car insurers however, cunningly haven't bothered to lower anyone else's premium to reflect the fact we're not all being priced generally to pay for the teenage lunatics anymore.
ooh, that was a bit ranty
zeduffman said:
Green Flag does this doesn't it? That's why they can give you those ridiculously low quotes on the adverts, but you won't get anywhere near that if you have an older car.
As far as I can tell, AA/RAC cover you, Green Flag and others cover the car.
AA will also be able to sell you a policy that covers the car.As far as I can tell, AA/RAC cover you, Green Flag and others cover the car.
I prefer having cover that covers me, in any car, even as a passenger. Because I don't like being stuck on the hard shoulder!
Dracoro said:
DaveH23 said:
My Peugeot has been recovered 3 times in 6 years.
Not bad for being 13 years old and 106,000 miles on the clock.
LOL Not bad for being 13 years old and 106,000 miles on the clock.
you're not helping your case, A recovery, on average, every other year is NOT good but I guess you have lower expectations but that's just as well
Over the past 20 years I have had one callout (alarm, fixed there and then). My wife has never called out, my mum has never called out, my dad has never called out. Needless to say, none of them have Peugeots
Edited by Dracoro on Friday 31st August 12:08
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