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Free Auto Insurance - TANSTAAFL

By admin on July 16th, 2007

No, not “free auto insurance quotes”. Actual claims of “free auto insurance”.

First of all, who is idiotic enough to pay for an insurance quote when there are so many online quote services (wink wink, nudge nudge). To the claim of actual “free auto insurance” I say, no shout, TANSTAAFL!

TANSTAAFL is an acronym from the writtings of Robert Heinlein: “There Ain’t No Such Thing As A Free Lunch” my favorite Heinlein Science Fiction novel, The Moon is a Harsh Mistress.

Heinlein’s wisdom applies to reports of “Free Car Insurance” that is making more frequent appearances in headlines and advertisements. In Australia, DaimlerChrysler is offering two years’ free car insurance to prospective buyers of its new Dodge Nitro SUV, around 10% of the value of the vehicle — not chump change. Volkswagen has already offered it here in the United States in some markets, to stimulate weak sales.

But what is really being offered?

Motley Fool’s article Get Free Car Insurance warns:

So, should you excitedly wait to buy your next car with free insurance? Not necessarily. Remember that these offers can cost the dealers up to around $3,000 per year per transaction — with younger drivers standing to gain the most. If a dealer is losing that much on a sale, he or she will likely be aiming to make much or all of that up elsewhere in the deal.

The article made me wonder if these offers would ever appear in urban areas with notoriously high insurance premiums.

The bottom line is you get what you pay for. Insurance companies and car companies are not in the habit of giving away profits. Shop wisely.

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