Carmakers Offer Car Insurance

Interesting idea I read in today's Oakland Press editorial section;

www.theoaklandpress.com By David Kniffen 1-31-06

Carmakers Should Offer Low-Cost Insurance

General Motors, Ford and Daimler-Chrysler are facing declining sales year after year. Cutbacks, layoffs and the possibility of bankruptcy are now part of the current uncertainty of the industry and the Motor City.

How can the Big Three regain their market share? Why are sales down? Consider how much it costs to drive a new car:

I lease a 2004 Jeep Grand Cherokee. It was zero down, $320 a month for 39 months, $3,850 per year. I'm a 26-year-old single male, with a few traffic tickets, no accidents, yet my 12-month insurance policy for my Jeep is $3,000.

Insurance makes up one-third of my driving cost, and it's nearly as much as my lease payment!

This isn't just my problem. Here are some quotes from Progressive Auto Insurance's Web site for a 26-year-old male with a perfect driving record: 2006 Chevy Impala LT, $2,495.64 per year; 2006 Dodge Ram 1500 Quad Cab ST-SLT, $2,681.64; 2006 Ford Focus ZX4 ST, $2,961.71.

And these were the lowest out of the three compebreastor's quotes they provided.

The solution for the Big Three is to provide their own coverage for their customers. They should entice buyers with a low-cost insurance directly from the showroom floor.

The highest portion of insurance coverage is the comprehensive and collision. Since carmakers can make their own replacement parts, offering insurance would cut out the middleman, adding to the savings.

By cutting premiums, more people would consider getting a new vehicle, rather than used, and the thought of an all-inclusive low payment, would sway the foreign car buyers back to domestic autos.

Since the Big Three all offer their own internal financing, adding insurance should be possible.