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Robert M wrote:
Seacrest,
Agreed. That's exactly what I said to him, though the points are off his driving record but still on record for insurance purposes. They weren't for moving violations. So, poor driving skills isn't the issue. Nonetheless, they are still causing agita. I already told him run and, if necessary, driving as far away from the deal as possible, arrange his own financing and insurance and pay cash for the car.
Robert
Interesting. They fall of your driving record with respect to insurance coverage/rates in 3 years, but are available for at least 7 under some instances, and I believe the judicial and law enforcement community has access back to when you got your license. I wonder if the ins co. is using something against him that they can't legally do.
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It sure does sound to me like a call to the state attorney general's office and/or insurance commissioner is in order. I've been around a long time and heard a lot of things, but this is one of the slimiest that's come to my attention for a while.
Not only would I recommend this person not fall for this trap, I think he should be out looking for a car from a different dealership.
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Racer X wrote:
...but are available for at least 7 under some instances...
I got a quote from Geico about five years ago that was nearly double that of 3 other companies. The only thing I could think of that would even start to jack the rate up that high was a fluke of an accident on my record that was 6y-9m old that ended up being listed as ~5% my fault.
I kind of like the gecko but hate the company. I would send back all their correspondence labeled Return To Sender and taped to a brick, but I ran out of bricks.
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I'm guessing it's either:
1) Co-signing in disguise,
2) A way to contact other people in case he defaults on his loan/lease. You know, "We're trying to find your friend to give him the prize he won. Do you know where he is?", or
3) A way to gather prospective buyers. They'll call you and say, "Your friend just bought a car from us and we gave him an awesome deal. Come down and we'll give you a great deal too." I'm guessing the more profit the made from him, the more "valuable" your name and number are. You know, birds of feather...
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Hi everyone,
I spoke to a friend in the insurance industry about this. He has never heard of it. Like all of you, he suspects it's a scam, cosigning in disguise or some other means by which the dealer was going to screw my buddy. So, I told my friend to walk away from both the deal and the dealership and, if the mood suits him, to report the dealership to the attorney general.
Thanks for the thoughts on the matter!
Robert
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What I don't understand is the stated relationship between a bad driving record and the ability to pay your insurance premiums on time for six months.
What has one to do with the other?
I wonder exactly what this "Sponsor" program is and how the dealership profits from it, or how they're protected. The dealership wants the car insured when it leaves the lot to protect their investment. So it's in their interest to get the buyer insured if he isn't already covered, to make a sale. That *could* be the entire extend of their motivation. Not all that evil.
But I still don't see how a "co-signer" for insurance compensates for a bad driving record.
And without knowing exactly what his driving record is, I wouldn't be too quick to consign him to public transportation. Especially since *most* of us should be making an effort to use it ourselves whenever possible, which most of us probably don't.
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Tell your friend to pick up the Yellow Pages and find himself a non-affiliated insurance broker.
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RAMd®d wrote:
What I don't understand is the stated relationship between a bad driving record and the ability to pay your insurance premiums on time for six months.
What has one to do with the other?
There is probably a strong correlation with poor driving record and credit risk. There is definitely a correlation between poor credit history and theft in the workplace and a reported correlation between poor credit and workplace performance. That is why many employers use credit scores to screen potential employees. It's a legal form of discrimination.
As a landlord, I definitely see a strong correlation between people with a poor credit history and failure to pay rent, demanding tenants that don't stay very long, and disputes between neighbors. I am allowed discriminate based on credit history, so most of the time when I reject a tenant it is for poor credit. I can't discriminate based on age, race, religion, etc, but I have noticed very strong correlations between credit and age, race and marital status. Income is not very strongly correlated with credit history.
Most of people I've encountered with poor driving records, ie. suspended licenses, DUIs, lots of accidents tend to be people I'd prefer to not do business with.
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There is definitely a correlation between poor credit history and theft in the workplace
That makes sense. That's way background investigations always cover one's credit history.
and a reported correlation between poor credit and workplace performance
I did not know that. I've known a couple of people who fit that description but I didn't ascribe a cause/effect relationship.
That is why many employers use credit scores to screen potential employees. It's a legal form of discrimination.
Understood, as is the fact that discrimination by definition is not intrinsically a bad thing.
As a landlord, I definitely see a strong correlation between people with a poor credit history and failure to pay rent, demanding tenants that don't stay very long, and disputes between neighbors
I've seen that as well.
Most of people I've encountered with poor driving records, ie. suspended licenses, DUIs, lots of accidents tend to be people I'd prefer to not do business with.
No argument there.
Still, I'm confused with the sponsor/insurance relationship. Somebody with a bad driving record is insurable only at (apparently) astronomic rates unless somebody "co-signs" or sponsors that person for six months, to see that the insured pays premiums on time. If he does not pay on time, doesn't the coverage lapse? Is the insurance company worried about paying a claim without payments being up to date?
In most states, a driver's record of infractions lasts about three years and is then expunged. Misdemeanor and felony violations stay on one's record far longer. So what does six months of on-time payments show? Logically, you must be correct-- the dealership-insurance company must see prompt payment as some kind insight to ones driving behavior. I don't agree, but I don't have actuarial tables.
Still, this is something I've never heard of, and it seems pretty odd.
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I've never heard of it either and think it's odd. That's why my initial reaction is that it's some sort of scam to cull potential customers, disguise a cosignee or help with future repoing.
Even though there might be a correlation between poor credit and other things, I don't mean to imply that everyone who has bad credit is a bad tenant, bad employee or bad person in any way. It's just when you have the luxury of choosing between someone with good credit and someone with poor or no credit, it's hard not to choose the one with good, long established credit history when that is the only thing you have to differentiate the two.
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