Finance houses add car insurance to their financing offers

Munich. Car insurance is becoming an important sales tool for auto traders.

Germany's auto finance houses are increasingly adding insurance policies to their financing offers, an Automobilwoche poll showed.

The auto trade profits from offering insurance because the policies bring customers into the traders' own repair workshops rather than an independent one. For example Ford halves a customer's excess payment when the damaged car repaired at a Ford authorized garage.

Germany's auto finance houses already sell between 10 and 27 percent of all new vehicles with insurance.

Insurance companies hope that their co-operation with the auto finance houses will result in more cross selling of policies that also include personal and property insurance.

Ford Financial Services sells 80 cross-selling contracts per 100 auto insurance policies. It hopes to increase this figure to 200 in the medium-term.

Reinhold Dieckmann of the German insurance company CC-Versicherungsdienste expects that in three years time 40 percent of all auto insurances will be sold through dealers.

Peter Bluemel, head of RCI Versicherungs-Service GmbH, which belongs to Renault Credit, hopes that by 2006 every other Renault and Nissan vehicle will be sold with insurance.

Thomas Nanntt, managing director at the Fiat Versicherungsdienst (FVD) said: "More than 80 percent of Fiat dealers want to intensify their co-operation with FVD and increase their insurance business."

Klaus-Dieter Schuermann, of VW Financial Services, said that auto insurance is increasingly becoming "an integrated part of the car buying process."

"Financial services create higher brand loyalty," said Schuermann.

Rudolf Wohlfahrt, head of Frey Financial Services (FFS) in Stuttgart, said monthly repayments are the decisive factor people consider when buying a new car.

"This includes repairs, tax and most importantly insurance," he said.

Tags: Retail Sales

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