It makes sense for a car rental company to offer drivers insurance. The car does belong to the rental company. The idea that an auto manufacturer would offer free insurance makes less sense.
GM (NYSE: GM) today announced that “Drivers in Oregon and Washington who take delivery of a new 2010, 2011 or 2012 Chevrolet, Buick, GMC or Cadillac car, truck or crossover between today and September 6 will receive a one-year insurance policy from MetLife Auto & Home at no additional cost.”
The offer causes a number of problems. The first is that it indicates GM cannot sell most of its models in Oregon or Washington. No company with sane management would offer expensive, unnecessary incentives to conquer a market it already holds.
Potential GM buyers in the other 48 states are likely to feel cheated. And, that impression is justified. GM may not be able to sell cars in two states. Why should other new buyers suffer because of that? People in Ohio wreck their cars, too.
Douglas A. McIntyre
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