GM is testing a program that offers buyers free insurance on vehicles like the Chevy Equinox.
Buy a car, get a check. Since Chrysler first launched the modern incentive wars, more than three decades ago, that’s become the standard pitch to win over reluctant buyers. But General Motors is trying something a little different to stand out from the crowd, offering some of its customers a free, one-year insurance policy.
The program, which runs until September 6th, pairs the automaker with MetLife. It is currently being offered only in Oregon and Washington, but GM officials say that if it gets a good response it could be rolled out more widely.
The decision to target the Pacific Northwest reflects the Detroit maker’s struggle to crack a market long dominated by Asian imports. (Click Hereto see which parts of the U.S. are “most patriotic” to American automakers.) Barely a third of shoppers in cities like Seattle and Portland opt for products assembled by Detroit’s Big Three.
“We want to give residents of Oregon and Washington another reason to discover Chevrolet, Buick, GMC and Cadillac vehicles,” said Chris Perry, U.S. vice president of General Motors marketing. “We have new products like the Chevrolet Cruze, Buick Regal, GMC Terrain and Cadillac CTS Coupe that are now even more appealing with a year’s worth of insurance.”
The free insurance program covers all four of the current GM brands sold in North America, Chevrolet, Cadillac, Buick and GMC, and all leftover 2010 and current 2011 models are included. The only exception: vehicles purchased or leased for certain commercial purposes.
GM says it won’t provide additional discounts for shoppers who prefer to stick with their own insurance company.
Based on statistics from Insurance Information Institute, the deal could be worth an average $727 for an Oregon motorist and $840 for drivers in Washington state.
Significantly, if the vehicle is totaled during the first year or 15,000 miles, MetLife will provide a replacement without charging the normal deductible called for in most insurance policies.
It’s not been revealed what the ties are between GM and MetLife and whether or how much the insurer is contributing financially, but as with GM, MetLife is clearly hoping to keep some of the customers it gets from the partnership once the year-long giveaway is completed.
When Chrysler first started offering cash-back deals, in the late 1970s, promoted under the theme, “Buy a car, get a check,” the rebates were measured in the hundreds of dollars. But, in recent years, struggling to rebuild momentum after its 2009 bankruptcy, the typical GM product has carried incentives pushing upwards of $3,000.
The challenge for the maker – and its competitors – has been not just to trim back on the profit-gobbling givebacks but also to find more effective promotions. Hyundai, for one, offered a vehicle buyback program, during the depths of the recent recession, in which a buyer could return their vehicle if they lost their job within the first year after purchase.