© Photo: Micah Sheldon
With the tight competition in the car loan industry, it seems that every creditor has designed all sorts of gimmicks. You might have heard of deals such as friends and family discounts, or the once famous “Buy a car, get a check.” Every deal sounds enterprising especially for first-time car buyers.
Today, General Motors launches yet another intriguing deal on the incentive game: they’re offering one year worth of car insurance.
The pilot program was unveiled in Washington and Oregon through its affiliate, MetLife Auto and Home. General Motor’s financing scheme provides a yearlong insurance policy with every purchase of a 2010 to 2012 model-year auto.
For the past few years, G.M.’s sales in the Pacific Northwest have notably been weak, in contrast with other regions; hence they came up with a marketing plan that hopes to revive its marketability.
The promo, set to run until Sept. 6, would veer G.M.’s back on track, said Terry Olson of Portland-based Barley & Graham Buick GMC’s general manager.
A survey conducted by CarGurus.com from January through June said that buyers in Pacific Northwest tend to favor foreign brands over home-based products. Although 67 percent of car buyers in Detroit and St. Louis bought domestic brands of vehicles, only 34 percent and 37 percent did in Seattle and Portland, respectively.
According to a G.M. spokesman, Tom Henderson, the company’s marketing strategy would bridge one concern of potential buyer’s: lack of financial capacity to acquire an insurance policy.
G.M. allocates around $3,000 worth of incentives per vehicle, currently the highest among major car manufacturers, said Edmunds.com, although this average incentive has reduced since April and May.
On the average, annual auto insurance premium in Oregon costs $1,189, while Washington State reflects $1,352 – both below the national average. The insurance policy offered by MetLife covers the vehicle as well as the driver for a full year.
The marketing department at G.M. expects that these incentives will lure drivers, who cannot afford expensive policies. Meanwhile, MetLife has prepared terms and conditions that safeguard both their interests as well as their clients’.
G.M. is not the first auto manufacture to use this strategy, Chevrolet Cobalt in Wisconsin has done the same, few years ago.
There’s still plenty of time to wait and see whether consumers at Portland will bite this strategy. Hopefully, by September 6, General Motor will be in full throttle.