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 pilotprogram in the United States to include one year of auto insurancefor its new models resulted in a 23 percent rise in sales in testmarkets.[@@]

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 autoinsurance underwritten by Nationwide Mutual Insurance Company at nocost to customers. The company offered coverage for every new Golf,New Beetle and New Beetle Convertible purchased, or leased, inIllinois and Wisconsin from Jan. 4 through March 31 this year.

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

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

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

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