How can you stay laser-focused on selling vehicles if you’re not confident that you have adequate business insurance for all of the unique hazards you face running a used auto dealership?
Used car dealerships like yours have always provided an invaluable service to people in need of transportation, but that fact has never been truer than it is today.
Due to an explosion of expensive in-vehicle technology systems and the popularity of bigger sport-utility vehicles and trucks, new car prices continue to rise at unprecedented rates and the price gap between new and used vehicles keeps getting wider.
This means that many Massachusetts and Connecticut consumers who would typically be looking to buy a new car can no longer afford to do so at these increased prices. Other car buyers simply no longer see the value in paying new car prices when they can get the same or similar vehicle, sometimes with relatively low mileage on it, at a better price from you.
More and more drivers across New England are turning to independent dealers like you to find quality, well-maintained vehicles that also fit their budget.
With this uptick in interest for used vehicles, it’s likely that you are moving more cars and trucks, and seeing more car buyers, on a daily, weekly and monthly basis than ever before. While all of this demand has probably driven up your car sales, it also has potentially increased your business risk for:
Physical damage to vehicles in transport, that are parked on your lot, or that are in your garage for repairs
Accidents that happen while a customer is browsing your lot or in your showroom
A crash to occur while a potential car buyer is test-driving a vehicle
Workplace injuries to members of your team
One of the ways to ensure that you are operating your business with as little exposure as possible to these and other potential risks you might face is to have the proper Used Auto Dealership Insurance in place.
The key components of a comprehensive Used Auto Dealership Insurance solution
This crucial protection, sometimes referred to as Garage Liability Insurance or Lot Insurance, may include the following specialized coverages and endorsements:
Dealers Open Lot Coverage
Also called Dealer Physical Damage Coverage, provides protection for any vehicles that you own, whether they are used for business purposes or are on your lot for sale. This coverage includes comprehensive protection against specific perils, such as fire, lightning, explosion, windstorm, hail, flood, theft, vandalism, and malicious mischief. It also provides collision coverage, which pays to repair one of your vehicles if damaged in an accident.
False Pretense Liability Coverage
Financially protects you from scams. For example, if you were to acquire a vehicle at an auction from someone who did not have legal title to it, then this coverage would pay for any related financial loss. This protection also safeguards you from any situation in which a car is taken from you in a fraudulent manner, like if a potential buyer makes off with your car during a test-drive.
Business Property Insurance
Covers damages or destruction of your company belongings including computers, furniture, supplies, equipment, and much more.
Auto Liability (including Dealer Plate Coverage)
Provides protection in case of a lawsuit stemming from an accident during a customer test-drive. This coverage extends to test-driven cars that your dealership does not actually own but that are for sale on your lot as well as cars that you are driving to and from a car auction, storage lot, repair facility or between car lots.
Automotive Professional Errors and Omissions
Covers you if a customer claims that you or one of your employees were negligent in any way, including that you gave them misleading advice, provided false lending or leasing information, or that you did not properly disclose odometer or prior damage facts about the car they bought.
Protects you against claims from incidents such as a customer slipping and injuring themselves in your showroom.
Garage Keepers Liability
Important protection for your business if you do repair or body work on vehicles that are not owned by your dealership. If you have customers’ cars in your possession for this purpose, then this coverage protects against damages that might happen to these vehicles while in your possession. But even if you’re not in the business of repairing other’s cars, you still might require this coverage if you ever test-drive a potential customer’s trade-in. In this case, not having Garage Keepers Liability could leave you with a gap in coverage for property damage to vehicles you do not own.
Dealers Driveaway Collision Coverage
Broadens the collision coverage for autos being driven or transported from point of purchase or distribution to destination. Without this protection, your collision coverage will only apply to vehicles driven within a 50-mile radius of your dealership. However, by including Dealer Driveaway Collision in your overall insurance solution, you will be covered for physical damages that occur during the pickup or delivery of vehicles to or from a point greater than 50 miles from the dealership.
Customer Complaint Legal Defense Coverage
An endorsement that is typically put in auto dealership insurance policies to provide legal defense, up to a specified amount, if a customer brings a suit against you. For example, if you sold a car to a customer and it is returned within 30 days and requires repairs of $700 or more, then the driver might bring a lemon law claim against you. If you have this coverage in place, though, any legal defense fees will be covered.
With these and so many other specialized insurance options available to you, it’s essential that you are working with an insurance partner who can identify the optimal insurance protection for your specific coverage needs and risk level.
HUB designs superior insurance and risk management solutions for used auto dealerships
For decades, the team at HUB International has served the insurance needs of used car dealerships of all sizes, from small family-owned stores that employ only a handful of employees to larger dealers that keep dozens of cars on their lot and have their own on-site inspection and mechanics team. Our commercial lines team specializes in matching each individual dealer’s insurance requirements with the carrier that best fits their unique situation and budget.
As one of the area’s largest, privately-owned, independent insurance agencies, we have strong partnerships with an extensive network of AmBest A-rated (or higher) carriers who have customized insurance options for used auto dealerships and whose rates are extremely competitive. All of our programs can also be customized to fit any floor plan financing requirements. If your operation has been running smoothly, without any losses in the recent past, then it is quite possible we will be able to beat your current policy price from one of our top-quality insurers.
If you choose to work with HUB International, the first thing we will do is set up an in-person meeting. One of our insurance professionals will schedule a time to come out to your dealership, so we can get to know you and your business and evaluate your current policy for any gaps that might be exposing you to unnecessary risk. By doing this thorough analysis of your current coverage, we can then provide you with informed insurance recommendations.
The HUB International team is here to help you safeguard your valuable dealership, your employees, your customers, and your vehicles from general business liabilities as well as from the special risks associated with owning an auto dealership. If you’re ready for a more personal relationship with a trusted insurance agent who is always looking out for you and your business, then contact us today or stop into either of our two convenient Massachusetts offices.
In addition to assisting you with the right auto dealership insurance solutions, HUB International can also serve your other business insurance needs, including: