Why Just Sell You a Car When They Can Sell You?

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There’s less and less money to be made selling you a car – the net profit earned on the sale of the average new car is only about 3 percent – so the car companies have decided to sell you instead.

It’s much more profitable because it’s not just the once, as when you buy a car. It’s every day you own the car, via the data about you they collect – and sell. And which they intend to use to extract more money from you, ongoing – as via insurance.

Which, of course, you are forced to buy.

Maybe not from them – yet – though it is certainly possible that buying insurance will soon be folded into the buying of the car and marketed as “convenient.”

Even if not, it hardly matters as you haven’t got much choice about insurance; it’s a government-enforced thing you have to buy and the insurers (all of them) are well aware of the fact that you have no choice and collude to structure – and price – their “services” accordingly.

GM (one of several big car companies) sees insurance selling as a big part of its future revenue stream – as GM used to be deep into financing, via its GMAC lending division.

Much more money there than in the car, itself.

And insurance is a potentially far more profitable business, since it is an adjustable business.

This has always been the case, of course. You get an adjusted insurance bill if you are issued a piece of payin’ paper – i.e., what is styled a “ticket” – for having ignored or transgressed some arbitrary traffic law.

Irrespective of the absence of claims filed against – or by you.

But if you didn’t get tickets, they had no excuse to adjust your bill and usually didn’t. What they don’t know doesn’t hurt you.

That’s a problem for the revenue stream or – as these people reveal in an “inside baseball” executive summary titled The New Auto Insurance Ecosystem: Telematics, Mobility and the Connected Car.

“The stage is set for insurers to develop more meaningful and mutually beneficial relationships with policyholders.

Indeed  it is.

Italics added, for just that reason.

Note the signature verbiage of the technocratic totalitarians. “Meaningful” – like a lifelong friendship, almost as so very caring – that will be “mutually beneficial”  . . . in the manner of the “unity” which is achieved when dissent is suppressed.

“Advances in machine-to-machine (M2M0 communication, or telematics, are rippling across the marketplace, generating data to more precisely assess the risk and reward for policyholders who adhere to safe driving practices.”

Italics also added.

Because it is left unspoken – and so, presumed – what constitutes “safe driving practices.” You should assume these presumptions are much the same as “the science” underpinning the weaponization of hypochondria and the “practices” expected of us in its name.

“Safe driving practices” doesn’t mean you haven’t wrecked – just as not being sick doesn’t mean you aren’t expected to perform various odd rituals as if you were.

“Safe driving practices” does not mean you are an attentive, skilled driver who knows how to control your car, as established by your having controlled it  . . . the indisputable evidence for that being the objective fact that you haven’t wrecked it.

“Safe driving practices” means accepting as unquestionable truth the risible assertion that it is always unsafe to drive any faster than any speed limit, ever – because every speed limit is held to represent a kind of edge-of-the-cliff beyond which extreme danger necessarily lies.

Kind of like showing your face in public.

One-size-fits-all and so always dumbed-down standards embodied by such things as speed limits and no-right-on-red signs are not merely legalisms but religious totems, exactly like the signs on the doors of stores demanding the wearing of face-effacers and other “practices,” with the same holy unction underpinning the both of them.

This of course has always been “the case” – so to speak. A driver who has never wrecked is nonetheless dunned on the basis of having received a “ticket” for driving faster than the sign says – of a piece with being punished for not wearing what the sign says. In both “cases,”  the absence of injury caused is irrelevant.

The assertion of possibility is sufficient.

What’s changed – what they badly want to change – is the possibility that your safe but irreligious driving goes unnoticed and so unpunished; this being a species of effrontery similar to that displayed by the healthy who flout the tenets of the sickness cult by not pretending they are sick, as by walking around with their faces showing.   

Both Faiths being fundamentally about controlling the Faithful. Which control is exercised by punishing those who aren’t Faithful.

And now they have the means to do it.

“For some time, auto manufacturers have provided connected vehicle services to discerning drivers.”

Oy vey…

“This includes GPS, emergency notification, roadside assistance, concierge services and other offerings . . . Today, devices self-installed or plugged into a vehicle’s onboard diagnostics (OBD)port,or professionally installed black boxes, transmit driver behavior and mileage directly to a carrier’s back offices . . .  As a result, many carriers and brokers worldwide are leveraging telematics data to create more precise rating variables that underpin new usage-based insurance (UBI) products . . .”

Parsed, what it means is they intend to adjust what you pay not every six months but every day. You may not have received a “ticket” this year – or during the past several years – but the data shows you drove faster than the speed limit today. Or accelerated “aggressively” – which is defined in the same way that “safe driving practices” are defined.

Many commercial drivers are already subject to such data-streaming, which is why so many commercial vehicles seem to be operated by little old ladies (not the kind from Pasadena, either). More than eggshell pressure on the accelerator – a swerve, to get around an actual little old lady gimping along at 27 in a 45 – and the data is streamed, the driver identified as not “practicing” the prescribed “safe” “practices” – and punished, accordingly.

This is what they – the insurance industry and the car industry – want to scale up, apply generally.

The motive is the ancient one – money, of which there is a great deal more to be made when every single “incident” of failure to”practice” is known unto them. The control is a side benefit.

“Telematics-supported UBI programs are upending the traditional auto insurance business model . . . These programs benefit both insurers and consumers by providing data for better risk-assessment as well as incentive-based pay-as-your-drive (PAYD) programs.

Italics added, once more.

One wonders whether it has occurred to the people pushing for this that they are destroying any “incentive” to bother with driving at all. They have lost sight of the fact,  known to every goose-plucker, that if you pluck the goose too assertively, the goose realizes what’s up and ceases to be cooperative.

“By embracing telematics-informed UBI programs, our research shows insurers can reap substantial returns on investment . . .”

Honest language, for once.

But if they kill the goose, no more feathers – much less golden eggs – for them.

. . .

Got a question about cars, Libertarian politics – or anything else? Click on the “ask Eric” link and send ’em in!

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18 COMMENTS

  1. I am stuck with such a monitoring system in my service truck.I drive around the DC area every day,just going with traffic speed wise and normal idiot(accident)avoidance is enough to keep my safety score at 80% as determined by corporate.This big brotherism and the covidiot actions by work and the general population at large makes me glad to be retiring and moving down South in a short while.I pity the kids just now starting in the job market.

  2. Eric,

    Thank you for another wonderful commentary on the insane world in which we all live in now.

    I was thinking how over the last year of your articles, that the word Clover has disappeared. Maybe, it is just me. But Covidiot’s and Clover’s are essential the same people. The insurance cartel plays on the neurosis of the clover’s with these “drive safe” schemes. Just like the neurosis of the Covidiot’s are played by government/medical axis.

    Just my observation. All the best.

    Sincerely,

    Mike

  3. So what is our work around? Short of just buying pre 2015 vehicles there has got to be a way to block the telemetry data from being transmitted. Allstate has been trying to get me to put one of these in my car for years now. I know what the market it as and i know what it really would be used for so i refuse to accept it.

  4. The source of a great deal of this issue is the consumerism many of us are consumed with. One must have that “new thing” whether they need or can afford it or not, all of which is the product of highly professional marketing. If one has a structurally sound old car, that isn’t bent so badly it can’t be aligned, one can do an enormous amount of work on it for the price of a new one. Like replace the entire drive train and suspension, and maybe the upholstery and dress up the body. True, you can’t get a loan for such, but hopefully it doesn’t all need to be done at once. You will have to manage your resources. The loan is the problem, since you have signed a contract to keep collision insurance on it. Which is where the OBD unit comes in. I doubt the insurance companies will ever get enthused about them for liability policies, since collision is where their money is. Depending on the age of the car, collision may not be that expensive, unless you have that OBD plug in and don’t drive like your terrified to do so. Starve the beast.

  5. I will trust the internet & market will come to the rescue, providing hacks & tools that will turn off or “feed” nanny devices the proper info to demonstrate to all that I am a safe driver.

  6. Schneider national were pioneers in monitoring their fleet….thats why their orange trucks are always holding everyone up. They do it to save money. A truck going 65mph or whatever they use its around 65, gets a couple percent better mileage. They need to bump it up a couple mph because it crazy. Control freaks.

  7. Eric, I’m under no delusion that the “free” navigation included with my 2020 Ford (con)Fusion was provided out of the goodness of the Ford Motor Company. While it does help in that I don’t need a Garmin nor to have roving data on my “sailfawn” (e.g., I can keep it to what I term a “geezer” plan, which T-(im)Mobile is willing to provide for twenty bucks a month, which is just unlimited texts and calls…eg., it’s a PHONE. Which, given that most of my routine is spent within some WiFi range, be it at work, home, (un)Safeway, Walley World, or the “gyme”, is no big deal for my four-year old LG phone to poke along. But does that “nav” come with “strings”? Oh, I’m pretty damned sure, although IDK about Ford reporting data to my insurer. Who can say, though, that already the ability to remotely shut down my ride isn’t already there? So if the mentally-ailing POTUS and his cronies get fed up with my politically incorrect rants, could they just start tracking my every move, to see if there’s anything they can “get” me on, or simply fix things so my brand new ride is an expensive paper weight? Of course, given that, they could just cut off my “sail fawn” access, Internet, and so on, rendering me in effect a “non-person”, the latter-day version of “Nacht und Nebel”.

  8. Between this kind of stuff, and the “Real ID” license I’ll have to get next time I renew, I think it might be time to become “undocumented”. I might not bother renewing the license, and I might just stop paying the insurance premiums. Hell, the illegals (oh, sorry, “undocumented workers”) manage to get away with it, why can’t I? Besides, I’m getting to be old enough that If they take me to court, I’ll just piss my pants and act like I have dementia.

  9. ‘the data shows you … accelerated “aggressively” – which is defined in the same way that “safe driving practices” are defined’ — EP

    Owing to the high torque of electric motors, absurdly fast 0 to 60 mph times of 3 seconds are possible with performance-oriented EVs.

    But if you actually USE this lighting-launch capability, your insurance rate skyrockets on an already costly vehicle.

    As can be said about most aspects of public policy these days, “It doesn’t have to make sense.”

    Might as well attach a trailer with a heavy diesel generator, to slow the acceleration and end long waits for recharging! 🙂

  10. To get the average driver on board, so to speak, they will probably make the incentives palatable or attractive to the driver, at first. One may even see a drop in insurance rates, at first.

    Once the concept has been embraced, it’s game over.

    • Oh, you mean just like the income tax was at first just a “small tax on the very wealthy”? When it comes to the Psychopaths In Charge, what goes around doesn’t come around, it continues to go around and around and around, until it lands precisely where they wanted it to.
      Reminds me of a conversation between Emerson and Thoreau, who was in jail for refusing conscription. Emerson: “What are you doing in there?”
      Thoreau: “What are you doing out there?”
      When laws are unjust, where should a just man be?

    • Progressive already does that with some kind of doohickey that plugs into the OBD port. It’s voluntary, and they sell it by telling you you’ll get a break on your premium for being a safe driver. You can bet that all the other insurance companies will do the same, and eventually, it won’t be voluntary anymore, it’ll be mandatory. Welcome to 1984.

    • They are already using incentives! Every auto insurance company has ads, promising to reduce your rates if you plug one of their spy boxes into your OBDII for a month

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