Auto makers may insure cars. Wonder if the high perf. marine market will attempt.
04-13-2005, 03:09 PM
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Auto makers may insure cars. Wonder if the high perf. marine market will attempt.
Manufacturers may insure cars
Covered vehicles could lure buyers
April 12, 2005
BY SARAH A. WEBSTER
FREE PRESS BUSINESS WRITER
In an attempt to lure consumers into their new vehicles, automakers and their dealers have given away cash and other freebies, such as fuel, computers and even compact cars with the purchase of a big truck.
Now, following the example of Volkswagen AG, some automakers are considering giving away a year of free car insurance, one of the biggest expenses in car ownership.
Volkswagen just ended a pilot program that ran during the first quarter of the year and provided one year of coverage through Nationwide Mutual Insurance Co. for every new Golf, Beetle and Beetle Convertible purchased or leased in Illinois and Wisconsin.
Proof of residency and a valid driver's license in either state were the only requirements for the program, which was called In the Car.
Nationwide, sales of those three vehicles declined 15 percent during the pilot period, which ran from Jan. 4 through March 31. But they rose a stark 23 percent in Wisconsin and Illinois during the program. Two-thirds of buyers said the insurance package influenced their purchase decision.
"It was a success," Tony Fouladpour, a Volkswagen spokesman, concluded.
Bob Wallach, managing member of Creative Innovators Associates LLC, an intellectual-property company based in Bethpage, N.Y., invented the program and is obtaining numerous patents on it.
Wallach said he's now in discussion with two automakers to adopt the program and plans to share the idea with only one. Creative Innovators makes money on the program through an intellectual property fee as well as a commission on the insurance.
Many automakers have thought about implementing a free car insurance program, Wallach said, but they have been unable to overcome substantial regulatory and actuarial hurdles. Actuaries determine the cost of insurance by analyzing risk factors, such as demographics.
But determining how much a program like In the Car might cost when insurance costs swing substantially among car buyers, and you don't know who will buy into the program, can be tricky and risky.
"Nobody has ever been able to figure out how to do this in the United States," said Wallach, who would not explain how his group overcame the obstacles. "Everyone's talked about it."
While everyone seemed pleased with the results of the incentive program, VW and Nationwide said there are no imminent plans to expand the program.
"Nationwide is now conducting a more thorough analysis of the program, which we anticipate will take some time to complete," Bonny Parker, vice president of standard auto product management for Nationwide, said in a statement.
Fouladpour said VW is evaluating the program.
Covered vehicles could lure buyers
April 12, 2005
BY SARAH A. WEBSTER
FREE PRESS BUSINESS WRITER
In an attempt to lure consumers into their new vehicles, automakers and their dealers have given away cash and other freebies, such as fuel, computers and even compact cars with the purchase of a big truck.
Now, following the example of Volkswagen AG, some automakers are considering giving away a year of free car insurance, one of the biggest expenses in car ownership.
Volkswagen just ended a pilot program that ran during the first quarter of the year and provided one year of coverage through Nationwide Mutual Insurance Co. for every new Golf, Beetle and Beetle Convertible purchased or leased in Illinois and Wisconsin.
Proof of residency and a valid driver's license in either state were the only requirements for the program, which was called In the Car.
Nationwide, sales of those three vehicles declined 15 percent during the pilot period, which ran from Jan. 4 through March 31. But they rose a stark 23 percent in Wisconsin and Illinois during the program. Two-thirds of buyers said the insurance package influenced their purchase decision.
"It was a success," Tony Fouladpour, a Volkswagen spokesman, concluded.
Bob Wallach, managing member of Creative Innovators Associates LLC, an intellectual-property company based in Bethpage, N.Y., invented the program and is obtaining numerous patents on it.
Wallach said he's now in discussion with two automakers to adopt the program and plans to share the idea with only one. Creative Innovators makes money on the program through an intellectual property fee as well as a commission on the insurance.
Many automakers have thought about implementing a free car insurance program, Wallach said, but they have been unable to overcome substantial regulatory and actuarial hurdles. Actuaries determine the cost of insurance by analyzing risk factors, such as demographics.
But determining how much a program like In the Car might cost when insurance costs swing substantially among car buyers, and you don't know who will buy into the program, can be tricky and risky.
"Nobody has ever been able to figure out how to do this in the United States," said Wallach, who would not explain how his group overcame the obstacles. "Everyone's talked about it."
While everyone seemed pleased with the results of the incentive program, VW and Nationwide said there are no imminent plans to expand the program.
"Nationwide is now conducting a more thorough analysis of the program, which we anticipate will take some time to complete," Bonny Parker, vice president of standard auto product management for Nationwide, said in a statement.
Fouladpour said VW is evaluating the program.
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04-14-2005, 08:03 AM
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Re: Auto makers may insure cars. Wonder if the high perf. marine market will attempt.
They offer their financing incentives to those with good credit. Why not offer the insurance to those with a good driving record?
