Fig. 5.1 shows insurance statistics on the number of accidents per million drivers in relation to age of drivers. These statistics are used by insurance companies to calculate car insurance premiums. [Figure 5.1] Use Fig. 5.1 to help you answer the following questions.

Mark scheme

Marking points from the official mark scheme (May/June 2024). The mark or mark type is shown in brackets.

1. [1] (a) 60-69
2. [4] (b) 1 mark for each factor and 1 mark for each explanation x 2
3. [1] (b) The value of the car (1) premiums will be higher if the car is new / expensive model
4. [1] (b) The model of the car/type of car e.g. sports car (1) premiums will be higher for cars with bigger engines
5. [1] (b) Drivers' history/records/number of accidents (1) premiums will be higher if drivers have committed driving offences such as speeding
6. [1] (b) The area where the car is used (1) the premium will be higher in locations where crime rates are higher / in urban areas
7. [1] (b) Where the car is kept at night (1) premiums will be lower if the car is locked away in a garage
8. [1] (b) Claims/past records/skilled driver (1) premiums will be higher if the driver has a history of car claims
9. [1] (b) Cost of repairs/condition of the car (1) premiums will be higher if parts are expensive to replace / allow example
10. [1] (b) Mileage of the car (1) premiums are higher for cars that spend more time on the road
11. [1] (b) Gender of the driver (1) premiums can be higher for males than females
12. [1] (b) Marital status (1) premiums can be higher for single people than married people
13. [1] (b) Occupation (1) premiums can be higher for high-risk jobs than low-risk jobs
14. [1] (b) Theft record of car/car brand (1) premiums can be higher for car more popular with car thieves
15. [1] (b) Medical record (1) premiums can be higher for people with certain medical conditions
16. [2] (c) Answer = $360
17. [1] (c) Method = 40/100 × $600 = $240, $600 – $240
18. [3] (d) 1 mark for each correct answer
19. [1] (d) Riding a bicycle to work causes air pollution. (FALSE)
20. [1] (d) Electric cars produce lower carbon emissions than petrol cars. (TRUE)
21. [1] (d) Environmental pressure groups promote increased use of transport for deliveries. (FALSE)
22. [6] (e) Up to 2 marks for describing reasons for having its own fleet of vans to make deliveries
23. [6] (e) Up to 2 marks for analysing whether (or not) a business should have its own fleet of vans to make deliveries
24. [6] (e) Up to 2 marks for evaluating whether (or not) a business should have its own fleet of vans to make deliveries
25. [6] (e) Arguments for: Provides direct contact with customers – leading to increased customer satisfaction
26. [6] (e) Arguments for: Goods are better supervised – so less theft
27. [6] (e) Arguments for: Delivery times can be flexible so no need to wait for someone else's vehicle / can be used at any time / 24/7
28. [6] (e) Arguments for: Advertising can be done on side of van so can promote business
29. [6] (e) Arguments for: More economic if regular loads so saves money
30. [6] (e) Arguments for: Less documentation/paperwork needed so cutting down on administration
31. [6] (e) Arguments for: Vans can be hired out – enabling income/profit to be earned
32. [6] (e) Arguments for: Specialised vans e.g. refrigerated vans can be bought – to meet business needs better
33. [6] (e) Arguments for: No rent paid to a third party – so the business will save money
34. [6] (e) Arguments for: Leased vehicles will be maintained by leasing company – reducing maintenance costs
35. [6] (e) Arguments for: Can deliver large amounts of goods at once as there is more capacity
36. [6] (e) Arguments against: High capital cost – with possible interest being paid to the bank for a loan
37. [6] (e) Arguments against: High running costs – such as fuel/drivers wages/decreasing profit
38. [6] (e) Arguments against: Need to employ someone to manage the fleet – adding to costs
39. [6] (e) Arguments against: May be difficult to obtain return loads so the vans are underused
40. [6] (e) Arguments against: May be involved in accidents so unable to be used
41. [6] (e) Arguments against: Money spent on own transport could be spent better – such as on a new website.
42. [6] (e) Evaluation: A business will have to decide whether the benefits outweigh the disadvantages. A small business would find it often better to use other companies' transport or when its own transport fleet cannot cope with the workload. Overall, if business has the necessary finance available, it should purchase its own fleet of vans so to facilitate deliveries at any time and decrease the costs of leasing.