A smart car is a vehicle that comes with onboard electronics, designed to make the driving experience that much more pleasurable. There are two potential points of confusion to consider. The first is the brand, ‘smart’, which represents just one kind of smart car. The second is that, nowadays, every car comes with some form of microelectronics or other – which means, effectively, that every car is smart.
The future looks set to be one shaped by an increasing preponderance of smart technologies, many of which will surely find their way into the cars we drive. Let’s take a look at these trends.
A modern smart car interior – illustrative photo. Image credit: Jonas Leupe via Unsplash, free license
Advancements in Technology
At the cutting edge of the luxury market, advances are being rolled out very quickly. Just a few years ago, technologies like automatic braking, lane assist and adaptive cruise control might have seemed like the stuff of science fiction. Now, however, these technologies are filtering their way down to the bottom of the market.
There are two economic factors behind this trend. The first is product innovation. As manufacturers build the same device over and over again, they cut out all of the errors and inefficiencies that made them so initially expensive to design. There are also economies of scale to consider. When you’re building an order of magnitude more of a given component, you can slash the per-unit cost of that component. There are many more cheap cars on the road than there are expensive ones, and thus, there’s the potential for substantial reductions.
Incentives for Affordability
So, how can motorists be tempted into investing in a smarter car?
Obviously, there’s the direct appeal that such vehicles might offer. Rear parking sensors are a good thing to have, and worth paying extra for.
On the other hand, more modern cars come with features and qualities that benefit the wider public. When a car produces fewer emissions, everyone is better off – particularly in city centres with lots of cars driving from place to place.
As such, governments can, and do, offer tax incentives to cars that emit less. If you’re driving a battery electric car in the UK, then you might end up paying zero road tax (though this is set to change). City authorities have also rolled out low-emission zones, which apply extra pressure to motorists.
As it becomes more affordable to make the switch to a new car, drivers might consider picking up more sophisticated forms of insurance. Is gap insurance worth it, for example? If you’re worried about depreciation, or the prospect of falling into negative equity, then the answer might be a resounding yes.
Market Competition – Driving Down Prices
Basic economics would suggest that, in a more competitive marketplace, prices will be driven downward. As more firms enter the smart car space, each offering a slightly different take on the formula, a price war could result that ultimately benefits consumers.
Moreover, a more competitive marketplace might offer a more diverse range of smart-car offerings. This might make it more likely for a given customer to find themselves a vehicle that suits their needs.