Sponsor to save money on auto insurance?

[Robert M]

Sponsor to save money on auto insurance?

Hi everyone,

Since I recently purchased a car, a friend of mine asked if i've ever heard of a "sponsor" program to save money on auto insurance. Since he has some points on his license from the insurance company - not the DMV/State/Etc - insurance only - the cost to insure the vehicle is pretty horrid. He was told by the finance person at dealership that he could save a tremendous amount of money if someone with a good credit rating and DMV record would "sponsor" him for six months. Meaning, this person would sign an agreement that says he/she will ensure the person buying the car will pay his insurance bill in a timely manner for six months and the person buying the car would benefit from his/her good insurance record. He said this was not the same as cosigning a loan and would go away after six months. He went further and told me the dealership said they had an agreement with an insurance company for this type of situation.

Admittedly, I'm relaying the information as it was presented to me and, it's quite possible I misunderstood aspects of it. Nonetheless, it definitely sent red flags flying and I told him don't even consider agreeing to anything like that until he (and his "sponsor") finds out more about it from a credible source of information. I've never heard of this before and, to me, it sounds like a ploy used by the dealership as a means of screwing him (the customer). Anyone ever heard of this type of thing before?

Thanks,

Robert

P.S. I'm not sponsoring him (or anyone for that matter) - I just have a knack for getting information, so he came to me for advice - lol!

[Buzz]

so let's get this straight; this insurance "sponsor" thing is being propagated by the finance department at a car dealership...?

"red flags"

"sounds like a ploy used by the dealership"

"screwing the customer"

"find out more about it from a credible source of information"

"I'm not sponsoring him "

"the dealership said they had an agreement with an insurance company for this type of situation"

"RED FLAGS!"

[Filliam H. Muffman]

Never heard of it before. I would guess either the dealership is getting a kickback by pushing people into a balloon car insurance plan, or they are getting a kickback by signing people up for a draconian marketing data acquisition program (AKA FreeCreditReport.com) that will start billing them after the first 6 months is up.

[Robert M]

Hi everyone,

The first thing I said to him is that it sounds like a means by which they're going to @#$#@$@ him and his sponsor. To call it fishy is an understatement. Glad I ain't a part of it.

Robert

[Racer X]

wonder if its a ploy to have a second wallet to go after if there is an accident and a lawsuit.

[Seacrest]

Run drive, do not walk, in the other direction of this "deal" as fast as possible (observing the posted speed limit).

If your "friend's" driving record is so bad that ordinary insurance is so exorbitant, perhaps he should consider the bus.

This would benefit society as well, as it gets a potential threat off the roads.

Alternatively, he should consider buying a used car for cash, in which case he would only be required to carry liability insurance.

(If liability alone is prohibitively expensive, then option 1 is definitely preferable.)

PS: One should always arrange, or be prepared to arrange, for one's own financing and insurance when buying a car at a dealership.

[bazookaman]

Racer X wrote:
wonder if its a ploy to have a second wallet to go after if there is an accident and a lawsuit.

Kind of like when you co-sign for someone?

[Seacrest]

Robert M wrote:
Since he has some points on his license from the insurance company - not the DMV/State/Etc - insurance only

I've never heard of this.
Why can't he just go to another insurer?
Does this mean he's blacklisted in some kind of national insurance database?
Is he a caveman?

[Robert M]

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

[Buzz]

reminds of the good old days in the mortgage biz, when the lenders required add'l insurance on loans that were something less than truly stellar. eventually enough people made a stink about what amounted to be shady practices in reality, and that aspect of the biz vaporized along w/ too many other regulations and now the world is in a heap o' hurt. the basic premise of insuring mortgages was sound, but the premiums and kickbacks would vary vastly from actuarial norms. this car deal smells real fishy, but car owners/drivers need to be insured. smells like the dealer has some sort of implicit or explicit liability that extends six months from time of sale, so they want to cover their butts until the sale is fully vested. again, the underlying premise may be sound, but the description makes it sound like the potential solution is fraught with even more potential abuse.