Courtesy cars 'cut profits'

Time 8:59 am, October 25, 2012

DEALERS’ courtesy cars are increasingly eating into their profit margins, says a recent report.

With private motor insurance companies dropping hire car cover, customers are becoming increasingly reliant on other means to insure their courtesy car use – with the burden quite often falling to dealers

According to DCML – who compiled the report – the instances of dealers insuring the cars themselves has surged by 30 per cent: with 24 per cent of courtesy car bookings now covered by dealers.

With a reported 50 per cent of dealers having to make a claim on such policies – with the average cost being nearly £3,000 – it’s easy to see how any customer service benefits could be outweighed by sheer costs.

‘In only a few years, the rate at which dealers are insuring courtesy cars for their customers has increased significantly, said DCML managing director, Vince Powell.

‘Clearly, they are taking up the slack left by private vehicle insurance policies which, with the advent of cheap online insurance, are becoming less likely to include automatic or free cover for courtesy cars.’

Jon Reay's avatar

Staff Writer Jon is one of the Car Dealer team's newest members. You can also find him contributing to AOL Cars.

More stories...

Server 51