Now, automakers are coming up with fresh ideas to attract buyers. One of the largest automakers GM, in collaboration with MetLife, is giving customers an offer that they cannot refuse. New car buyers will now get free auto insurance for a period of one year, from General Motors Co. in collaboration with MetLife.
In an announcement made last month, GM stated that this offer has been designed to give customers value-added services by making things more affordable and also streamlining the car buying experience. Auto insurance is an expensive affair and that is one of the biggest challenges faced by vehicle owners today. This offer would be valid until September 6, 2011.
This is a trial program and GM plans to expand the program which is presently on in two states. However, this expansion is likely to shake up at least two industries, whichare the carmakers as well as insurance providers to come up with offers in order to attract customers.
However, the word ‘free’ does not necessarily mean anything to some people.
A woman from Fort Wayne is presently paying around $1,200 annually on her auto insurance to State Farm for a 10-year-old Ford Escape SUV.
Hence, if the deal offered by the GM dealer was more than $1,200 per year, then the woman will not necessarily save anything with the GM deal.
Another 35-year-old, Karissa Snodgrass stated that even discounts on the homeowners insurance needs to be factored in, while determining whether a years’ free auto insurance is a good bargain or not. The woman from Fort Wayne gets discounts as she has multiple policies from Indiana Farm Bureau, and she has been insuring with them ever since she got her license at the age of 16.
In fact, once a person signs up with a particular insurer, they rarely switch companies. This information is based on the available statistics.
There are very few, maybe around 10% of the policyholders who will switch insurance providers at any given point in time, as per the 2009 study conducted by J.D. Power & Associates. A majority of them always continue with the same insurer.
It is that brand loyalty that MetLife is dependent on, in order to expand its customer base, stated Loretta Waters who is the spokeswoman for Insurance Information Institute, which is a New York Based Non-profit that is supported by the insurance sector. MetLife wishes to expand its base in Oregon as well as Washington.
