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Seven-day free cover can smooth the way to a sale

The credit crunch and following recession hasn’t been an easy ride for the automotive industry, and with consumer confidence continuing to plummet it is up to dealerships to ensure everything is in place to close a sale.

A list of things are waiting to go wrong. Is there a part exchange to consider? Has a suitable financing arrangement been made? Tax? Insurance?

To tick the insurance box, an increasing number of dealerships are offering their customers seven-day free cover, allowing them to drive away in their new purchase and giving them extra time to sort out their insurance cover later.

Allianz Retail offers the product as part of a package to dealerships. Partnership development manager Simon Davey said: “Seven-day insurance is designed with both customers and dealers in mind.

"It assists dealers with completing the car purchase process, as an insurance certificate is required in order to tax the car and complete the sale.

"The customer benefits from the peace of mind of their new car purchase being covered from day one – with an opportunity to try the free insurance product for seven days.”

The insurance has other benefits too.

“Manufacturer-branded seven-day insurance products often include the benefit that, in the event of an accident, the customer’s car will be repaired by brand trained technicians, in approved bodyshops, using only genuine parts,” added Davey, who last year signed a long-term contract with Volkswagen Group UK for the provision of motor insurance products to customers of Audi, Seat, Skoda and Volkswagen passenger and commercial vehicles.

“In a ‘tailored partnerships’ approach, we would work with the manufacturer to develop an insurance proposition that is suitable for its customer base, taking into consideration the needs of the customer and dealer,” he said.

The dealer’s perspective

South-east based new and used car group Caffyns uses seven-day free insurance to save time on sales and to offer customers added value.

Operations director Guy Ainsley said: “The main dealer benefit is that dealers are sure of having a valid insurance certificate to tax a new car with. This is of great use, particularly when time is tight. Even when the vehicle has been ordered well in advance of handover, it’s one less thing to worry about.”

And, he added, one of the main advantages for dealers was that there was no cost involved.

“The benefit to the insurance company is access to a live customer base that is in-market for seven days. Also, if it was not able to convert in the first year, the insurance company has very detailed, timely data the next year,” Ainsley said.

Caffyns advertises the product “tactically” with some franchises, and Ainsley admits that it is one of the “rare things when there are no real downsides for us”.

“The administration is straightforward,” he explained. “We use a number of suppliers depending on the franchise, but they all give instant or near instant documentation. The information needed to set-up the policy is already in the customer file.”

“The customer can buy a car and drive away that day. Also, if they buy at short notice, it gives them time to shop around for insurance quotes.”

The Car Shop

Used car chain The Car Shop has been using HPI Driveaway, supplied through Aviva, since 2005 and now almost half of their customers take advantage of the product.

Car Shop group operations director Jonathan Dunkley explained: “About 48% of our customers take up Driveaway, which is a clear indication of the positive results it brings us.

"We secure more deals and boost customer satisfaction, which has a direct impact on our profits.”

Once the purchase is agreed, dealers provide customers with an offer leaflet. They can then complete the registration process over the phone or online and an email is sent to the dealership with the cover notice.

The money part

Insurers tend to work with dealerships on an individual basis to construct a partnership approach on how the car seller benefits from seven-day free insurance.

This can be through a number of ways – a fee to carry the product or additional referral fees if customers take up the annual insurance.

HPI Driveaway operations manager Mike Unsworth said: “ There are many ways in which a dealer can benefit from taking Driveaway.

"We can talk to dealers individually about how it can work best for their business, and the dealer doesn’t have to be FSA authorised to carry the product.”
 

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