, Inc., has become the first dealership consolidator to launch a vehicle insurance program, teaming up with Nationwide Insurance as the provider.
The consolidator, with 106 dealerships in 13 states, also has reorganized its management team into three geographic divisions, each led by a former dealer or distributor manager.
Under the agreement with Nationwide, the Columbus, OH-based insurer is delegating agents to guide Sonic dealers in reviews of customer insurance coverage and presentation of no-obligation rate quotes.
"Our commitment to building relationships will help turn one-time customers into lifetime customers for both companies," says Nationwide's vice-president of agency support, William Ramsden.
A Nationwide spokesman says company agents also will assist Sonic dealer F&I personnel in training for state property and casualty insurance license exams, which are required to sell vehicle policies.
Sonic's three divisions are western, covering California and Nevada, headed by Michael A. Lee as vice-president; central, Oklahoma and Texas, led by Rene Islip, and eastern, comprising the nine other states, headed by B. Lee Crumpton, Jr.
Mr. Lee previously served SoutheastDistributors as vice president for sales, retail development and strategic planning; Mr. Crumpton operated Gwinnett , Atlanta, for the Hendrick Automotive Group, and Mr. Islip is dealer operator of Sonic's Lute Riley Honda, Dallas.
The new division chiefs report to Sonic's executive vice president of retail operations, Jeffrey C. Rachor. He says Lute Riley was Sonic's most profitable store last year with more than 600 new units sold and $12 million in Internet-related revenue.
What happens when a prospective customer takes that important test drive - and gets in an accident?
Who pays for the repairs? Does the customer's insurance cover such damage to dealer inventory? Or does the dealership's garage insurance policy cover it?
In Missouri, that's unclear. State law says that, depending on circumstances, both the customer's and the dealership's insurance covers customers who bang up loaners or demos.
However there's confusion over whose insurance is primary. Some Missouri appellate court opinions have only added to the confusion.
The Missouri Dealers Association is trying this year to get the law to say the customer's insurance is primary in such cases.
Dealers should know their insurance premium dollars are safe from negligent customers' test drives, says the association.
It's an important issue because studies indicate that those growing ranks of Internet car shoppers are particularly interested in test drives.
For instance, a Polk study and others say Internet shoppers place more importance on the test drive than do traditional shoppers.
"Dealerships can provide that one key piece of information that customers cannot access on-line - the actual driving experience," says Karen Piurkowski, Polk's director of loyalty.
Great, say Missouri dealers. But they ask why they should experience the liabilities of test drives gone bad.
In a related matter, dealer CPA Carl Woodward, notes that the insurance liability question can extend to the practice of dealership employees driving demos as a company perk.
"What happens when an employee wrecks a demonstrator?" says Mr. Woodward of Woodward & Associates in Bloomington, IL. "We suggest that dealers should hold their employees responsible for any and all deductibles - whether or not the accident is the employee's fault."
He says if the accident is not the employee's fault, the deductible from the dealership's insurance policy is the responsibility of the employee, and the other driver's insurance company should, in turn, reimburse the employee for his or her deductible.
If the employee is at fault, the staffer can't complain about paying 100% of the deductible, says Mr. Woodward.
"The employee would have been required to pay the deductible if he or she owned the vehicle personally," he notes.
Employees who balk at that expectation should forfeit their privilege to drive dealership-owned vehicles, according to Mr. Woodward.
He adds that dealers might want to go easier on full-time dealership drivers, such as parts department workers, who are at fault in accidents which occur on company business. He suggests they pay some, but not all, of the deductible.