1 Post – 7 Issues
My son read on one of my posts that his car, an Audi, had a recall. It was the second recall on this particular vehicle while his wife’s car, another Audi has had one.
Doing the right thing he rang up and sort to have the matter addressed. The car was booked in this morning. Issue 1: motor vehicles are often the subject to recall and many of these are safety related. Please ensure that you act on recall notices whether it is on your car or anything else. They are important and that is why I make a point of publishing them every week or more often if super urgent.
To offset the inconvenience, the dealership offered him a loan car but then hit him up for $50 to buy down the $2,500 excess. Issue 2: – is this true customer service or just another way to make quick money by fleecing a customer?
We had just renewed our Corporate Travel and Steve recalled that we had $6,000 coverage for hire car excesses but to be sure he rang me to double check.
I advised him that I did not have the wording with me my ‘gut’ told me no for 2 reasons. Would the loan car be treated as a hire car and secondly, being a corporate travel policy this would not be regarded as corporate travel as the distance involved was less than 50 kilometres, the distance from memory that constituted a trip under our policy. [Please note not all travel policies have this coverage and the distance does vary between policies]. My advice to Steve was that it is better to be safe than sorry, do not take the risk, just pay the $50 fee, which I offered was very steep. I have seen Murphy’s Law in action too many times in my line of work where the day you take the risk is the day you have the accident.
He advised this to the lady at the service desk who said that in her opinion the corporate travel policy would cover the buy down and that he did not need it. Issue 3: How can she come to this conclusion without having access to the actual policy wording?
Issue 4: Should the person involved be giving and advice on what is in effect insurance product? Does she have a licence under the Financial Services Reform Act? If she does not need one why not? If she does need one, do they have one? In the case of Steve, no Product Disclosure Statement or Financial Service Guide was offered?
Issue 5: Do they have the right professional indemnity insurance to protect them if they were to provide incorrect financial advice?
Issue 6 Is this just another form of Add On Insurance that needs to be stamped out or at least the pricing brought into line with reality. I did a quick calculation in my head. $50 per day, 6 days a week [Monday to Saturday], for 50 weeks a year. [I allowed for days like Christmas and servicing of the vehicle.] This comes to $15,000 per year premium for $2,500 coverage. Even if half the people do not take out the insurance, then it is $7,500 in premium 3 times the sum insured.
What also needs to be taken into consideration is that if they follow the practice of some hire car companies they slug you the $2,500 if you do not take out the buy down coverage even if the amount of damage does reach that level. Bear in mind they get the parts at cost not retail etc. I have no evidence that this dealership does this but this is what is happening out there in the market.
Other unanswered questions is what happens if there is a right of recovery after a motor vehicle accident? Does the coverage protect against first party and third party issues?
In my view the whole $50 fee is a rip off in the same vein as tyre and rim insurance and all the other rubbish products we saw in the recent Royal Commission. Another one that I have written about is the airfare guarantee that has popped up of late in TV ads.
Issue 7: the kicker was that an hour after getting into work after all this stuffing around, that the parts required to fix the defect are not in stock and that it is at least 3 weeks away! Why would you not check this basic thing before you book the car in? Is it to get two lots of $50?
I am not sure Steve will be rushing out to buy another Audi when up to today he was a big fan of the vehicle.