GM's Bad Driver Appreciation Program

Bertel Schmitt
by Bertel Schmitt

We didn’t want to mention it when we wrote about GM’s buy a car, get free insurance deal. If we would have said it, it would have been the nasty B-word all over again. The rest of the media showed less compunction. “The worse you drive, the bigger the deal” headlined MSN Money. The deal can be staggering under the right or wrong circumstances, says MSN Money:

“For a busy Seattle family with two teenage boys — one of whom has a speeding ticket? We ran comparison quotes on a shiny new 2011 Chevrolet Tahoe LTZ. The lowest premium we found was $4,890 a year; the highest was $10,300.”

MSN interviewed Jessica Caldwell of Edmunds.com ( video here, no embed,) and she had this to say:

“It looks like anyone can qualify. So if you are that 22 year old living at home, and your mom and dad have disposable income and want to buy a Camaro, sign up for it.”

So is that what he meant when GM spokesman Tom Henderson said that many potential new car buyers found it difficult to afford insurance for a new vehicle?

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • APaGttH APaGttH on Jul 09, 2011
    “For a busy Seattle family with two teenage boys — one of whom has a speeding ticket? We ran comparison quotes on a shiny new 2011 Chevrolet Tahoe LTZ. The lowest premium we found was $4,890 a year; the highest was $10,300.” Who the heck are they calling for insurance?!?! I live in Puget Sound - I own two cars (admitted don't have a single ticket) and my insurance isn't' even 25% of the "lowest" bid; and I'm insured to the teeth. Maybe I have a Polyanna view on insurance and a really good deal? When I read about this yesterday I thought to myself, "so what, big deal, they're going to give me maybe $600 for the year and rip me away from an insurance company I'm happy with." Also, doesn't the under writing department at Met Life have the final say? I mean if someone is applying for this program and they don't meet under writing standards, GM forces Met Life to write the insurance? Is that what people are saying?
    • See 2 previous
    • Pch101 Pch101 on Jul 09, 2011
      @Pch101 you could have just wrote that instead of being a tool You might want to keep that admonition in mind for yourself the next time that you try to insist that the Cruze couldn't possibly have high fleet numbers, as you continually confuse fleet percentages with inventory days while claiming that I had no idea what I was talking about. (I note that you didn't see the need to provide a mea culpa when I provided the hard numbers for April Cruze fleet sales, which were 27%.) So you are saying General Motors finance department over rules Met Life underwriters. Wow. Truly stunned. I don't see why. GM should have decent data on the sales volumes that are generated by promotions that are similar to this. MetLife should have good actuarial data on the claims that are typical of such models during their first year. Combine that with some number crunching, and the two companies should be able to figure out what to pay whom for the resulting risk and the benefit that goes to GM for higher sales and to MetLife for the resulting customer base. Insurance is about pooling risk. An actuarial wouldn't have a hard time figuring out what type of deal to cut for something like this. The fact that the press freaks out about it tells me that they don't know anything about insurance or how insurers manage risk so that they are able to stay in business.
  • MBella MBella on Jul 09, 2011

    All I can say, is that If GM carries out this deal in Michigan, I will likely be buying a GM vehicle. Michigan has the highest insurance rates though, so I don't see it happening anytime soon.

  • Forraymond Forraymond on Jul 09, 2011

    I remember VW trying this several years back. How did it work out for them?

    • CJinSD CJinSD on Jul 09, 2011

      Was it VW or Mazda? It wasn't good for whoever did it and they killed the program as soon as they realized that insurance companies knew what they're doing and weren't unfairly overcharging drivers of their brand of cars.

  • CJinSD CJinSD on Jul 09, 2011

    People with inexpensive car insurance might not see the value in this program, but you can bet people who are dealing with assigned risk premiums in the mid four to low five figure range will be thrilled!

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