Free/£99 insurance

[bobfett]

Been hearing the corsa ad on the radio a lot recently- the one that's selling the insurance deals.

Something like "Drivers aged 21-75 get free insurance for a year, drivers aged 18-20 contribute £99 to their premium and agree to the fitting of a telematics box"

Now, it's only on certain models ("Excite" I think) which are presumably the base engined ones but it got me wondering about how it's actually affordable/profitable for vauxhall?

Obviously a fair few are going to be older people whose premiums would be a few hundred quid but I would imagine a lot of very young drivers (or their parents) are going to be weighing up an older car for a couple of grand, a contingency fund for repairs/mots etc. and a (good few in some cases) couple of grand in insurance and deciding that the finance, safety, reliability etc. of a new car is the better deal in the longer run.

How are Vauxhall making this work? Tie ins to servicing? High rate finance? In house underwriting? Loss leading?(!)

I remember back when insurance for young drivers wasn't so horrific this was quite a regular thing- Citroen I seem to remember did it a lot on the Saxo?

Edited by bobfett on Friday 12th September 13:59

[DrDeAtH]

Could be a number of things. Insurance is probably underwritten by GMAC which is GM groups own financial section.
Could be a manufacturer contribution.

Either way, they just want to sell more cars to young drivers, and face it, who wants to pay circa 3k for insurance on their first car, which would be worth little and could be unreliable. When for similar outlay you can be driving something new with a warranty and insurance.

[marshalla]

"Jesuit" marketing.

Get 'em into the brand early and most of them will stick with it when they're really profitable suckers.

[Fastdruid]

I hate the Corsa but as a new young driver it's a bit of a no-brainer, an insured car for less than the insurance would be one a second hand motor!

Vauxhall get to shift more cars (which brings the individual car price down), they get young drivers into "Vauxhall" who will spend money on servicing etc etc.

I'm sure they take a little hit to their profit on the car sale but make it up over time with everything else.

[SturdyHSV]

Get people on the finance train as early as possible, come end of term in a few years they'll get a better offer on their next Vauxhall than jumping ship to go elsewhere. Fingers crossed it'll even instill some brand loyalty too in a few people who'll then stay with Vauxhall as they age.

More Vauxhalls seen around young people, more selfies with a Vauxhall badge in the background, more facebook updates with pictures of a Corsa in, and on and on and on.

[dozydavenport]

I own one of the corsas that is included in the deal(bought car before deal)
It is a corsa excite and although it has the 1.2 engine(unbelievably not the base engine) it is loaded with kit e.g Bluetooth phone and aux/USB stereo, heated half leather seats and steering wheel etc.
It is a good car for a young driver as it has no power to do anything with,
My personal view though is that insurance is dirt cheap on this model anyway, for example my insurance currently is:
20 years old
License for 1 year 10 months
1 non fault claim
1 years no claims
No points
£566 a year



Would have like £99 a year insurance though!!

[bobfett]

dozydavenport said:

I own one of the corsas that is included in the deal(bought car before deal)
It is a corsa excite and although it has the 1.2 engine(unbelievably not the base engine) it is loaded with kit e.g Bluetooth phone and aux/USB stereo, heated half leather seats and steering wheel etc.
It is a good car for a young driver as it has no power to do anything with,
My personal view though is that insurance is dirt cheap on this model anyway, for example my insurance currently is:
20 years old
License for 1 year 10 months
1 non fault claim
1 years no claims
No points
£566 a year

Would have like £99 a year insurance though!!

That does sound remarkably cheap (assuming no fronting etc going on).

However, I can't believe that VX have put a 64hp 1.0 engine in the corsa. 18.2 seconds to 60....

[NooBish AbbZ]

Wow, had I not bought a motorbike a few months ago, this would be very tempting

[folos]

bobfett said:

That does sound remarkably cheap (assuming no fronting etc going on).

However, I can't believe that VX have put a 64hp 1.0 engine in the corsa. 18.2 seconds to 60....

Dangerously slow imo especially on a short slip road or for overtaking. My first car was a '97 1.2 clio - nowhere near fast enough that I'd kill myself but adequate for normal driving. I'd imagine the Corsa is heavier too.

Cost £700 to buy and I paid £1100 to insure it, this was in 2009 and I was 18.

Edited by folos on Friday 12th September 09:59

[was8v]

I bet they won't discount the price at all.

E.g. My sister bought a new Corsa few years back, and fairly easily got it for £2k less than sticker price.

That £2k pays for the insurance.

[bobfett]

folos said:

bobfett said:

That does sound remarkably cheap (assuming no fronting etc going on).

However, I can't believe that VX have put a 64hp 1.0 engine in the corsa. 18.2 seconds to 60....

Dangerously slow imo especially on a short slip road or for overtaking. My first car was a '97 1.2 clio - nowhere near fast enough that I'd kill myself but adequate for normal driving. I'd imagine the Corsa is heavier too.

Cost £700 to buy and I paid £1100 to insure it, this was in 2009 and I was 18.

For comparison my K11 micra had a 1.0 with 54hp and that was slow but not problematically so. An extra 10hp for a much bigger, more modern car? No thanks.

I guess it'd be OK if you literally never went outside a city, but in that why case would you be buying a corsa (which nowadays is a pretty big car) and not something smaller? Maybe it's the "real cheap introductory model" and they never actually sell any.

[BoRED S2upid]

New car? If you walked in without this deal and asked for £500 off you would get it so they are giving you the same discount in a different way plus probably screwing you on the finance too or do they still do 0% finance?

[DrDeAtH]

Could be a number of things. Insurance is probably underwritten by GMAC which is GM groups own financial section.
Could be a manufacturer contribution.

Either way, they just want to sell more cars to young drivers, and face it, who wants to pay circa 3k for insurance on their first car, which would be worth little and could be unreliable. When for similar outlay you can be driving something new with a warranty and insurance.

[okie592]

They have been making this shape of corsa since 1690 so it must be so cheap for them to make and the majority of young people that will bin it won't claim off insurance, so they will have to pay out very little that way


Plus it says if you drive erratically they will cancel your insurance. The majority of young people I know don't drive fast at all

[mcflurry]

bobfett said:

Something like "Drivers aged 21-75 get free insurance for a year, drivers aged 18-20 contribute £99 to their premium and agree to the fitting of a telematics box"

How are Vauxhall making this work? Tie ins to servicing? High rate finance? In house underwriting? Loss leading?(!)

High excess? IIRC Ford had a £700 excess on a similar product a few years ago.
Presumably there are enough non 17-21 year olds buying these too, in order for the marketing maths to work

[CYMR0]

Corsa Excite - £10k with five years' 0% and 1 year's insurance.

Corsa S - admittedly poverty spec and pre-reg - £7k.

So your £3k is funding insurance, five years' interest (maybe £1,200 worth), air con and alloys.

[98elise]

was8v said:

I bet they won't discount the price at all.

E.g. My sister bought a new Corsa few years back, and fairly easily got it for £2k less than sticker price.

That £2k pays for the insurance.

This will be the answer. One way or another you are paying for the insurance.

[bobfett]

CYMR0 said:

So your £3k is funding insurance, five years' interest (maybe £1,200 worth), air con and alloys.

Pretty good deal if you're 18 and just passed your test.

Sounds like it's a combination of things and to be fair I'd only considered the headline offer and the selling of a single car without any of the other factors. All interesting

Edited by bobfett on Friday 12th September 15:00

[rallycross]

This was a big success for Citroen back in the late 80's with the Ax then in the 90's with the Saxo - free insurance offers gave them a huge lift in sales, smart move by Vauxhall.

[daemon]

98elise said:

was8v said:

I bet they won't discount the price at all.

E.g. My sister bought a new Corsa few years back, and fairly easily got it for £2k less than sticker price.

That £2k pays for the insurance.

This will be the answer. One way or another you are paying for the insurance.

Also includes 0% finance over five years.

Cant be bad?

BUT, yes, they're doing all this instead of heavy discounting.

Seems to be working for them, given the amount of new vauxhalls about.

Hardly a new ploy though, has been done before