Every car dealership wants to sell their inventory. Dealership owners are happy when that perfect customer walks in and buys a car. The customer seems to have perfect credit, a decent down payment, and a desire to buy a new car right off the lot. Unfortunately, your employees can do all of the due diligence that they’re required to, but things can still go awry.
So, what happens when that customer uses a fake ID and other documents to make a purchase at your dealership? Your business takes the loss – or does it? It all depends on whether or not you have a false pretense insurance policy. Here’s why these insurance policies are so crucial.
Protects Against Scams and Other Issues
There are a lot of things that can go wrong when someone tries to scam a dealership. All of them can end up in lengthy lawsuits or court cases that take a long time to remedy. Meanwhile, the car, truck, or SUV in question is not a part of your inventory anymore, so you can’t sell it to someone else. Thankfully, your false pretense insurance can pick up some of the costs and help keep things afloat during the process.
What does false pretense insurance cover? There are multiple situations in which these kinds of policies provide help. For example:
Issues with Test Drives – Many dealerships allow people to test drive their vehicles without an employee present. This allows them to truly get an unbiased feel for the car or truck. However, what happens if the driver doesn’t return? You’ll have to get law enforcement involved, and in the meantime, anything can happen to that vehicle.
Problems with Titles – When someone comes into a dealership to purchase a new car, they usually have an older one to trade in. What happens if the title isn’t free and clear to the point that they weren’t supposed to sign it over? By the time your employees realize the problem, the customer could be on their way home with their new car. You’ll have to go through the court system in some cases to find a solution here.
Buying with a Bad Check – Sometimes, a personal or bank check can seem good at first glance, until your bank rejects it for a lack of funds. When that’s their down payment for a car, your dealership ends up without the money. You’ll need to use your insurance to recoup those losses.
Your Dealership is Your Livelihood
Remember that the vehicles on your car lot are more than just merchandise waiting to be sold: they’re also your livelihood. When you allow a scammer or mis-intentioned person to make a purchase, no matter how much due diligence you perform, you’re letting them get away with a part of your business. You need to have the right protections in place with false pretense insurance to protect your assets.
Have Questions? Contact Charlotte Insurance
Want to learn more about false pretense insurance for your auto dealership? Contact Charlotte Insurance. Our agents can explore and explain all available options and put together the insurance coverage plan your business needs.