The Hidden Costs of Connected Cars


The Hidden Costs of Connected Cars You get rear-ended at an icy intersection or sideswiped in a parking lot: an inconvenient, but manageable problem. You alert your insurance and contact your mechanic to discuss repairs. But if your car is a recent model, what comes next might be more involved than you anticipated. New technology is driving up the cost of previously simple and inexpensive car repairs, as well as insurance premiums.

Here's what you need to know about the issue, and what you can do.

What are connected cars?

Much like smart homes, which allow you to turn on the heat and scan for intruders from your smartphone, a connected car can communicate with other devices, sending and receiving a wide variety of data. The cars of the future will not only let you know when you need an oil change; they'll help you schedule an appointment. Connected cars will help you find a parking spot, order at a drive through, alert emergency responders, and yes, drive themselves. The good news is that this new model is destined to keep us safer and improve the longevity of our cars. The bad news is that, at least in the short term, the shift towards connected cars may mean fewer choices and higher costs for the consumer.

How connected cars impact auto repairs:

One downside of these heavily-computerized vehicles is that when your car gets damaged, those damages might also impact the sensitive safety and communication systems inside your car, making repairs more expensive sometimes, shockingly so. In addition, modern car repairs can require advanced expertise and increased labor, limiting your choice of where to have your vehicle repaired.

Connected cars and insurance:

Connected cars are already changing the insurance landscape by collecting data on specific vehicles and using it to measure potential risk. This could mean premiums that are individually tailored to each owner if you're a safe and cautious driver, that could be good news. On the flip side, some insurers are raising premiums to accommodate the increased cost of repairs.

What consumers can do:

This connected car wave of the future isn't stopping, and, unfortunately, costs for consumers may stay high as the shift takes place. As regulations around connected cars are put into place, consumers should stay involved so that their privacy and interests are protected in the long run. But there are many reasons to be optimistic. Connected cars will usher in an era of unprecedented safety for road travel and greatly reduce the number of accidents, meaning there will be repairs needed in the first place. Today's automobiles are already vastly safer than the cars of previous eras. So while they may cost more to maintain, the benefit of saving lives is probably worth it.

For any questions about auto insurance, call or contact Executive Insurance & Financial Services today.

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