In marketing its called “Induced Differentiation,” a fancy word for lying. Of course VW and Nationwide are not trying to lose money on the deal. The cost of the insurance will be added into the cost of the car and the MSRP. One way or another the consumer will pay for it. IMO, Nationwide has come up with a terrible underwriting scheme and they very well may lose money on the lucrative young driver market. Hahaahaah!!!!!!!
VW and Nationwide should call Yamaha! Yamaha was the first innovator of such a scheme. It was very complex and they did a lot of research, development and got approvals from insurance departments across the nation. Yamaha paid the insurance premiums and DID NOT adjust the MSRP or “negotiated” price on each sale. A buyer could decline the insurance, but that did not get them any reduced price. Dealers are independent, do not offer the insurance and do not pay anything for it. The dealer can negotiate whatever price they want for the vehicle with a customer, and that even includes giving the customer the vehicle FREE (if the dealer wants to lose money). Young buyers were the attraction then, as are now in this case with VW. We in insurance know that this scheme is flawed and will not be successful. It will prove too expensive to VW and they will discontinue it quickly, I’m sure. Nationwide will not lose unless their rates for young drivers are already too low.
i believe that the car sales person does not require a license somehow. i dont know how the ill. dept of ins has approved the wording ” free insurance”. in my 30 years exp, i don’t think they have ever allowed this phrase to be used because there is no such thing. it lends to certainly unfair adverstising, if not false advertising. i remember when someone advertised “no down payment, the first payment starts your policy” and the illinois dept made them cease from using the wording
There is a program that enables Dealerships to Spot Deliver vehicles with a temporary binder with no underwriting criteria. The Dealership is the Insured under an Annual Commercial Policy (separate from their Garage Policy), the consumer is considered “additional insured”. Totally legal and accepted in 37 states with more on the way. No underwriting. All drivers accepted. Accepted by many Financial Institutions as proof of insurance. No sign up fee or monthly minumums. Underwritten by an AM Best “A” rated carrier.
Spot Insurance Program. Helps dealers sell more cars. Full coverage. Dealer selects the length of term. Protects everyone’s interests. Underwritten by an “A” rated carrier. Available in 34 states.
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In marketing its called “Induced Differentiation,” a fancy word for lying. Of course VW and Nationwide are not trying to lose money on the deal. The cost of the insurance will be added into the cost of the car and the MSRP. One way or another the consumer will pay for it. IMO, Nationwide has come up with a terrible underwriting scheme and they very well may lose money on the lucrative young driver market. Hahaahaah!!!!!!!
VW and Nationwide should call Yamaha! Yamaha was the first innovator of such a scheme. It was very complex and they did a lot of research, development and got approvals from insurance departments across the nation. Yamaha paid the insurance premiums and DID NOT adjust the MSRP or “negotiated” price on each sale. A buyer could decline the insurance, but that did not get them any reduced price. Dealers are independent, do not offer the insurance and do not pay anything for it. The dealer can negotiate whatever price they want for the vehicle with a customer, and that even includes giving the customer the vehicle FREE (if the dealer wants to lose money). Young buyers were the attraction then, as are now in this case with VW. We in insurance know that this scheme is flawed and will not be successful. It will prove too expensive to VW and they will discontinue it quickly, I’m sure. Nationwide will not lose unless their rates for young drivers are already too low.
Wait until Spitzer gets wind of this!
i believe that the car sales person does not require a license somehow. i dont know how the ill. dept of ins has approved the wording ” free insurance”. in my 30 years exp, i don’t think they have ever allowed this phrase to be used because there is no such thing. it lends to certainly unfair adverstising, if not false advertising. i remember when someone advertised “no down payment, the first payment starts your policy” and the illinois dept made them cease from using the wording
There is a program that enables Dealerships to Spot Deliver vehicles with a temporary binder with no underwriting criteria. The Dealership is the Insured under an Annual Commercial Policy (separate from their Garage Policy), the consumer is considered “additional insured”. Totally legal and accepted in 37 states with more on the way. No underwriting. All drivers accepted. Accepted by many Financial Institutions as proof of insurance. No sign up fee or monthly minumums. Underwritten by an AM Best “A” rated carrier.
This is a contract. Where is the consideration. You cannot give Insurance away.
Spot Insurance Program. Helps dealers sell more cars. Full coverage. Dealer selects the length of term. Protects everyone’s interests. Underwritten by an “A” rated carrier. Available in 34 states.
For more info:
steves@oscomega.com