Author: Carrie Kirby / Source: Wise Bread
You hear a lot about driverless cars these days, but the truth is, they have a lot of hurdles to overcome before one will be rolling up to your front door to pick you up. One hurdle is public opinion, with a AAA survey showing that 68 percent of baby boomers and even 49 percent of millennials are scared to ride in one.
That fear is rational enough, considering that the vehicles currently being tested still have trouble handling unexpected conditions, such as snow-covered roads. There are also ethical dilemmas, such as how the piloting software should choose between injuring the driver and injuring a pedestrian. And as with most new technologies, privacy could also be a real issue.
Despite all those challenges, self-driving cars are coming. Research firm IHS Automotive has predicted that there will be as many as 54 million of them on U.S. roads by 2035. When that happens, will you be better or worse off financially? There are a lot of ways that driverless cars could affect your bottom line.
1. You will spend less on insurance
Once all cars on the road are driverless, car accidents are expected to decline — in fact, consulting firm KPMG predicts a 90 percent reduction in crashes by 2050. And any accidents that happen would be the fault of malfunctioning hardware, not user error — and therefore the manufacturer’s responsibility. KPMG predicts these changes will shrink the auto insurance sector by 71 percent. Even in the short term, while people are still buying auto insurance, they are likely to reduce or drop their liability coverage as the liability shifts to the manufacturer.
2. Early models will be expensive
The first cars to be autonomous will likely be high-end brands, such as Ferrari, Audi, and of course, Tesla. That adds quite a bit of sticker shock on its own. On top of that, the self-driving technology is expected to add between $7,000 and $10,000 to a car’s price in 2025; by 2035, the differential will shrink to $3,000, IHS Automotive predicts.
3. Expensive drunken driving convictions could be a thing of the past
The gravest costs of drunken driving are human lives: Over 10,000 people die every year because someone got behind the wheel intoxicated, according to the Centers for Disease Control and Prevention. But there are also steep financial costs, even if you don’t get into a crash. A national survey by Nolo put the average cost of a first-time DUI arrest at $6,500 to cover costs such as the ticket, towing, bail, attorney, increase in insurance rates, and other expenses. That doesn’t include lost wages, which can amount to thousands more.
Once fully self-driving cars are safe and legal, owning one would be one way to…
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