Almost one year into lockdown and with no end to restrictions likely for the foreseeable future, the outlook for many does seem bleak. But there are silver linings that are becoming increasingly evident. One of the most apparent is the sheer display of true British resolve, where people have found innovative ways to start their own small businesses after being furloughed or made redundant. Alan Inskip writes
In fact, recent government data has revealed that 13,257 new companies were registered in 2020 compared to 11,503 in 2019 [1] – an increase of 15%, which is a clear indication of the rise of the entrepreneurial spirit in the UK economy. Among the top businesses are food and drink delivery and home cleaning services [2].
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The rise of the van
The common denominator among many of these trades is the humble light commercial vehicle (LCV), more commonly known as the van. There are currently around 4.5 million vans in use in the UK, and the fleet has grown 50% over the past decade – double the growth-rate of the car market. The new LCV sector is now worth £10 billion a year in the UK, with 900,000 used vans also sold annually [3].
Mike Hawes, Society of Motor Manufacturers and Traders (SMMT) CEO perfectly summarises the growing economic importance of the van: “The UK’s van fleet is the backbone of our society, driving our economy and allowing millions of workers to carry out jobs that our country relies on. The sector has shown incredible resilience throughout the ongoing crisis and these numbers indicate some confidence is returning as operators seek flexibility and lower operating costs.”
While the latest official data [4] shows that new LCV registrations are down 22% year-on-year compared to 2019 – the devil is in the detail. The first half of the year saw a huge dip in figures as lockdowns took effect for the first time and there was a growing feeling of uncertainty for the future.
The second half of 2020 has shown a much more positive trend, with LCV registrations actually increasing 15% compared to the same period in 2019. The used van market is also looking healthy, with August 2020 breaking new records for sales of used LCVs, with values up 28% year-on-year, bucking the traditional seasonal slowdown and setting an all-time average selling price record [5].
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By GlobalDataThe driver of van growth
With a growing sentiment towards supporting local, more than 4 out of 5 (83%) consumers are prepared to pay a little extra to support a local business instead of a large corporation in the wake of COVID-19 [6]. This is particularly relevant as half of all vans operate locally, typically within 15 miles of their base daily, reflecting ownership of sole traders and micro businesses [7].
Looking to the future, the rise of online shopping is expected to be a major contributor to growth in van reliant industries such as courier and delivery services. This growth is set to continue with the sector’s market value forecast to increase by 92% between 2019 and 2024 to reach £21 billion. The boom in courier and delivery services comes as over four in ten (42%) Brits said they had done more online shopping since the start of the pandemic [8].
A flexible insurance solution for a flexible business model
This positive news of growth in van-based sectors correlates with Tempcover’s own sales data which reveals that temporary van insurance policy sales grew substantially in 2020 – a 17% year-on-year increase compared to 2019, with no sign of yielding anytime soon. This rise in sales can be attributed to the fact that temporary van insurance offers the flexibility that fits entirely in line with the demands of the business during peak and quiet times. Van owners do not need to commit to amending their annual policy for additional drivers and risk raising their premiums in uncertain trading conditions.
Instead, they get fully-comprehensive cover for the just the time required – anywhere between one hour and 28 days. And it takes just 90 seconds following a simple digital quote and buy process, thereby enabling them to scale up or down quickly without incurring long-term costs. An added benefit is there’s no risk to any existing No Claims Discount, as it’s a separate and standalone policy.
As a nation, we owe a great deal of gratitude to our van drivers – whether they are veterans, rookies or simply doing it as a part-time job to supplement income. They have all kept our economy on the move despite all the turmoil, and we are proud to support them in any way we can.
Alan Inskip, Tempcover founder & CEO
