'WHY HAVEN'T YOU DONE THIS BEFORE?'

Ford expects one-third of its 4,750 U.S. dealers to be actively enrolled in its new Vehicle Insurance Program by Jan. 1, by which time it should be licensed for the coverage in all states.

That's the forecast from James M. Moritz, Ford Credit's director of insurance operations, who says dealer feedback has been "extremely positive in the 35 states already on board" as of June.

Ford Credit is moving quickly in tandem with insurance partner Hartford Financial Services to establish the program nationwide. Hartford agents have been assigned to facilitate dealer sales, a step needed pending state licensing of dealer F&I personnel for property and casualty insurance sales.

"However we are focusing first on dealer back-end benefits in vehicle repairs and OEM parts sales, plus customer value in having their vehicle insurance conveniently placed at their dealership and supported by their brand manufacturer," says Lee Doyle, Ford Credit's communication relations and strategy manager for insurance operations.

Ford and Lincoln Mercury dealers participating as Designated Repair body shops (DRPs) are on tap for increased service and parts revenues, says Mr. Moritz.

The Ford-Hartford policy waives a $100 deductible if repairs are done at the originating dealer, using Ford OEM parts to boot. Full replacement cost is paid for vehicle totaled within one year or 15,000 miles, also handled at the originating dealer.

"Appraisals can be done at the dealerships, many of whom will set up offices with Hartford agents until they have their own licensed F&I staffers," says Mr. Moritz. "Towing and like replacement vehicles are provided, and all in all dealers already are finding customers asking, 'Why haven't you done this before?'"

The program already is being showcased on Ford Internet sites, such as www.fordvip.com, with "posts" promised insurance premium quotes and referred to participating Ford and L M dealers. One advantage customers like is absence of any need to shop for body shop estimates or drive to a distant appraiser's location for a repair estimate, says Ms. Doyle.

Down the road, Ford is looking at adding its Aston Martin, Jaguar, Land Rover, Mazda and Volvo affiliates to the program.

Hartford agents will give dealer F&I staffers, who want to sell the package, guidance on the one-week exam prep course required by state insurance commissions as a condition for selling property and casualty coverage.

"The exam is no piece of cake like a driver's license test," warns Ms. Doyle. "But for F&I managers selling credit insurance, maintenance policies and GAP protection, offering vehicle insurance branded by Ford makes a lot of sense from both a revenue and customer loyalty perspective."

Mr. Moritz says another inducement for customers later is that premiums could be added to their loan or lease contract payments, although that isn't being done until the program fully rolls out nationally.

Ford and L M dealers handling other brands already report that customers are inquiring as to whether the Hartford policies are available to them. They're not.

BMW and Sonic Automotive have teamed up with Chubb Financial Services and Nationwide Insurance, respectively, for vehicle insurance programs, and DaimlerChrysler has surveyed its dealers on whether they also would like to access a similar insurance program.

A GMAC executive says"It's doubtful we would stay out if our dealers wanted to hop aboard. Ford's rollout to dealers with both Ford and GM brands almost certainly means we'll be taking a serious look at this again."

GM tested vehicle insurance in the 1980s, using its own Motors Insurance affiliate. The program lasted only a few years, yielding skimpy profits and numerous problems of the type implicit in the area of vehicle accidents, says a GM executive.

DaimlerChrysler Chairman and CEO Juergen E. Schrempp recently expressed interest in adding vehicle insurance as a customer retention and dealer enhancement factor. DC and Volkswagen offer vehicle insurance through their European dealerships as a routine measure.