The insurance mafia has made book by making insurance mandatory.
The customer hasn’t got much room to haggle when he can’t say no.
Imagine what car buying would be like if you weren’t allowed to leave the showroom – if you had to buy a car. Maybe not this car – or that car.
But a car, regardless. One that met the “mandatory minimums” they decreed.
That’s the Dirty Pool which the car insurance mafia plays. But as bad as it is not being able to say no their offer-you-can’t-refuse, it’s about to get worse.
Under the current regime, even though you’re forced to buy auto insurance coverage, that coverage is at least loosely based upon your individual risk profile. If you’re prone to “accidents” (which for the most part aren’t, being the result of avoidable driver error) your rates are adjusted upward. If you are not “accident” prone, you will (properly) pay less.
Some of this, of course, is based on more general criteria – e.g., the young (and old) being statistically more “accident” prone the not-young but not-yet-old – and on more dubious correlations such as the victim (whoops, the insured) having received a ticket for “speeding” or some other such, notwithstanding the absence of “accidents” on the victim’s driving record.
Also, you can choose to buy a less-costly-to-insure brand or type of car (e.g., a family sedan) rather than a more-expensive-to-insure car (e.g., a sports car or luxury car). Most of all, you can choose to own an older – and paid-for – car and buy only the minimum coverage decreed by the mafia. You can skip collision coverage – which those who make payments have to buy.
So – even though you can’t say no to insurance – you can to some extent tamp down your premium costs.
Now imagine one-size-fits-all coverage – based on the the most “accident”-prone driver, the one with the worst record of incurring losses and getting tickets. The glaucoma-fogged, semi-senile oldster. The reckless texting teenager.
Everyone pays the same (more) regardless of who they are, how old they are – or how they drive.
The insurance mafia – in partnership with the car industry – is working on exactly such as system and it’s pure genius from the standpoint of their cashflow. It could eliminate the “losses” of lower-priced policies based on lower individual risk profiles.
Instead of us buying or leasing a particular car – and paying a premium (and a monthly payment, if we finance) based on that particular car and our particular record/risk profile – we are to be nudged into buying a subscription to a brand of car. We will then be able to drive various cars manufactured under that label – the bait on the hook – rather than be “tied down” to just one car.
Start out the month with a sedan – end it with an SUV. Pick a sports car the month after that. It’s all part of the subscription.
And so is the cost of the insurance coverage. It’s folded into the monthly subscription fee – and it’s one-size-fits all.
Which makes it haltingly expensive.
No surprise there. You – Good Driver A, in your 40s, no “accidents” – are lumped into the same pool of risk with everyone else. And, of course, you’re coverage is based on the cost-to-fix for multiple vehicles, all new. None inexpensive and even if one or two of them are less so, the others in the subscription deal are less so and thus the average goes up.
So does your payment.
Example: GM’s Book by Cadillac subscription. For just $1,800 per month (a deal compared with BMW and Porsche’s subscription plans, which go for $2,000 per month) plus a $500 fee to join you can drive up to 18 different Cadillac models each year. Of course, you can only drive one of them at a time – even though you are being charged (in effect) a fee equivalent to multiple payments.
Meanwhile, Cadillac currently offers a $299/month lease deal on the 2018 ATS sedan. Or get a CTS for $469 per month. Or the new XT5 crossover SUV for $339 per month.
Or lease all three – for $700 per month less than the cost of the Book by Cadillac subscription.
That way, you’ll have some money left over to pay for insurance.
Better yet, just buy one – and save yourself about $1,200 per month. You’ll have more than enough left over for “coverage,” plus gas – and you’ll eventually own the thing and pay nothing per month.
Aye, there’s the rub.
The mafia – and that now includes the car industry, which has decided it is better to join ’em if you can’t beat ’em – doesn’t want you to own your car. There is no money in that.
Well, there is less money in that.
What they want is more money – ongoing. Payments in perpetuity. And not just for the high-end stuff like Cadillacs and BMWs, Porsches and Volvos. This subscription thing is going to be hard-sold at every level.
You can’t fault them for this. Making money is what businesses do.
The part you can fault them for is the nudge. The making-mandatory. They’ve done this with insurance already. Forcing us to buy “coverage” based on the obnoxious-to-liberty idea that might-cause-damage is the same thing as did-cause-damage. Forcing us to pay for harms we haven’t caused – for the benefit of hugely profitable private businesses, which use the force of government to line their pockets at our expense.
And now it’s occurred to them that subscriptions can work the same magic. It may not become a legal mandate in the sense that insurance is. But they are working on making it de facto unavoidable – by acceding to every outrageous mandate (saaaaaaaaaaafety, fuel economy) ginned up by the government and even thinking up a few of their own. All of which is making cars ever-more-expensive to buy, which makes financing them harder and harder.
Which results in fewer and fewer people able to do so, even if they want to.
Enter the subscription. Eternal rent payments on a thing you’ll never own. Plus “coverage.”
It’s as economically unhinged an idea as buying a $40,000 electric car in order to avoid spending $40 on a fill-up.
But just like electric cars (and automated cars) it promises to make them book – at our expense.
. . .
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The same moral police officer who earns $24,000 per year and says that he loves the Bill of Rights might be happy to torture if he was paid $100,000 a year.
Hi Free Speech,
I am pretty sure most armed government workers take (rather than earn) considerably more than $24k. Also, I do not grok how there can be such a thing as a “moral” one given the gross immorality (as distinct from legality) of the laws they forcibly enforce, from “buckle up for saaaaaaaafety” to caging people for putting arbitrarily proscribed substances in their own bodies to serving as the Thug Scrum for the organized theft called taxation.
How many automotive companies have gone out of business in the last century?
Nearly all that were started, for various reasons.
Now, during the same century, how many insurance companies have gone out of business?
Insurance companies have arguably put many car companies out of business, by jacking up rates on the specific people (say, young men) who would’ve otherwise bought specific types of cars (say, high-performance coupes), so the buyers don’t buy the cars and the money spent on them is wasted – unavailable to the auto maker to use to develop a new vehicle that WILL sell in the warped new financial environment the insurance company created. With no funding available, well, you’re AMC.
Hell, I remember when I was 18 and couldn’t get the Trans Am or Eclipse GS-T I could afford to BUY, buy not INSURE.
I could have either one of those cars TODAY, but it just wouldn’t be the same.
Amen, Ice Age –
I am certain one of the main reasons the youth of today generally isn’t much into cars is precisely because of the cost to insure – and that you can’t dodge being “covered” due to got-damned computer panopticon surveillance. I was able to drive for several years without “coverage” back in the ’80s because the government lacked the wherewithal to check on everyone; it was a safe bet to check the box and drive on.
Today, they use computers – which the mafia can access, as if they were the government – to check status all the time and if the catch you, you are in big trouble.
I despise insurance companies even more than the government, if such a thing is possible.
These guys are looking at Apple and trying to copy them. Apple is desperate to get everyone on a monthly payment plan/subscription model for their devices because ongoing tech support is expensive and users demand “free” stuff. So they shift all the backup and content to the cloud, charge you a fee for storage on their servers, then make it very hard to use someone else’s (or your own) service. And that price is unbelievable when compared to just about every other solution out there. Of course the only other choice (besides nothing) is Google hoovering up all your data and blasting you with advertising.
They think that people will eventually settle into a car they like and not change it out every few weeks. But I could see (for example) real estate salespeople changing out their vehicles just because they’re dirty, or the new car smell is starting to fade. And because they spend a lot of time ferrying clients around looking at houses they have to be driving vehicles that make them look successful. I’d love to see the fine print of the contract, I’ll bet there’s a limit on miles driven per month or rules about maintaining condition, etc. People will ignore that part and get big bills tacked on for everything I’m sure. Then there will be outrage.
Lordy! Twenty one thousand six hundred dollars a year for auto insurance? The rich really are different.
In a sane world, someone would have hog-tied Cass Sunstein and duct taped him to a chair in front of a TV playing endless reruns of “Gilligan’s Island” in an otherwise dark and silent room the very day his book “Nudge” came out. This SOB and all others like him are exceptionally dangerous. As C.S. Lewis said, those like him will never leave us alone, they will torment us without end, for ” they do so with the approval of their consciences.”
Jesus Palamino! This guy really needs his own planet. I’ve heard some naive notions of how electricity works, but this?
“Fast charge squirts DC into the battery at a huge rate, supplied by an expensive (e.g. $10k or more) charger.”
Wow, this cat is on the fast isn’t he? Ill be looking for his name “Saint Peter” on this year’s list of Nobel Prize nominees, you betcha!
Also, note that Peter – like almost all EV defenders – neglects to admit or even discuss the fact that the “fast” charger can only recharge to 80 percent capacity in order to avoid short-lifing the battery. That means you lose 20 percent of the best-case range at “fast” charging stations.
Which means having to stop – again – even sooner!
Even just fast charging to 80% can be damaging the cells. It takes a detailed technical look to see if it is or not for any particular battery powered device. The marketing materials won’t tell. Remember it only needs to live through the warranty.
Yep, more proof this is an alien visitor dropping these pearls of wisdom.
“And actually, unlike an ICE engine it doesn’t cost me in additional energy to put my foot down because electric motors are pretty efficient at most speeds and loads.”
Does this include loads of B.S. we should be swallowing, or loads of expertise on the part of this “high priest” of the EV? Apparently his planet has variable-rate physics that change with respect to social dogma. Apparently we have a lot of catching up to do if we have any hope of living in “his” utopia!
Oh My……I just lifted this fresh cowpie from another from “enlightened” visitor to our planet…..
“I have a lot of sympathy for auto dealers because the market place is going to change soon. EVs will need less maintenance. Ultimately, as autopilot facilities become more advanced, the number of collisions will also reduce, reducing the need for vehicle body repair shops.”
Thus sayeth the poor sap who clearly has not had the joy, or expense, of rebuilding or refurbishing an electric motor, let alone the “drivetrain” of our glorious savior, the EV. Where do all these automotive religious zealots
come from anyway? I guess ignorance is not only bliss, it can be entire “social event”, who would guess?
I’ve had an epiphany, well, maybe I’ve just come to a sad conclusion. The tree of knowledge, and the fruit-eating thereof, has not only set us apart from the beasts, but has burdened us with intellect (among other things), and that “sin” is fast becoming our ultimate undoing. So is this the “death” that God was referring to when telling Adam and Eve “ye shall surely die”? I have other interpretations of “the Book” I won’t get into right now, but let’s just stick to one epiphany, er, observation at a time. Any takers?
Some say the snake is really the good guy, since he told the truth. You simply get knowledge from eating the apple. But, some say that God was the good guy. You would tell a lie to a child to make them feel better, to have a better life. He told the lie because he wanted his children to live better lives, what was good for them. So indeed seeking knowledge and truth does eventually lead to the seeker’s demise. As those who seek truth die out, and reproduce less, those who accept the lies, and do not seek truth, will reproduce more, out-breeding those who seek truth. So it is a self-correcting “problem”. Maybe the truth seekers, the apple-eaters, are the problem as far as the divine are concerned.
On the flip-side, those who base their world in reality and truth tend to survive collapses in civilization, thus creating a new society based on rationality and freedom. Then the freedoms and truth-seekers diminish until the cycle repeats again. Maybe on a long-term scale it all equals out. As has been said before, it just sucks to be us in this particular part of the cycle. I don’t think the borg can be defeated, coming to terms with it is what I’m working on now.