VW: Insurance Tie-In A Success

By Michael Ha

NU Online News Service, April 13, 3:30 p.m. EDT?German carmaker Volkswagen said its novel pilot program in the United States to include one year of auto insurance for its new models resulted in a 23 percent rise in sales in test markets.[@@]

The pilot program's results were announced today by Long Island, N.Y.-based consulting firm Creative Innovators Associates LLC, which developed the idea, and Volkswagen of America Inc.

In the program, Volkswagen had provided one year of auto insurance underwritten by Nationwide Mutual Insurance Company at no cost to customers. The company offered coverage for every new Golf, New Beetle and New Beetle Convertible purchased, or leased, in Illinois and Wisconsin from Jan. 4 through March 31 this year.

After analyzing the pilot program, Volkswagen said it found that year-to-year sales of these three models rose 23 percent in Wisconsin and Illinois during the three-month program?in contrast to a decline of 15 percent on those models nationally.

Further, according to a poll by Creative Innovators, whose agency call center handled the initial customer and dealer contact, two-thirds of respondents in the program said the car/insurance bundling "greatly" or "somewhat" influenced their decision to purchase the car. The poll also found that the program attracted male and female drivers in nearly equal numbers.

Volkswagen of America spokesman Tony Fouladpour told National Underwriter that the program was a success and that the automaker will continue to evaluate the pilot results.

"The pilot program was a success in our view?we did see a spike in sales. However, we don't have any plans on whether to continue the program or not. We are still evaluating it," Mr. Fouladpour said.

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VW: Insurance Tie-In A Success

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