March 8, 2010: Insurance program caters to test riders

By Karin Gelschus
Associate Editor
Almost 90 percent of motorcycle buyers said a test ride had a moderate or strong influence on their purchase decision. Despite that statistic, less than half of consumers were offered a test ride in 2009, according to the annual J.D. Power and Associates survey.
To help change that statistic, MBA Insurance, a provider of commercial vehicle rental insurance for more than 30 years, is seeking to make it easier for dealers to offer test rides and in turn, increase sales.
“All the dealers say, ‘I could sell a lot more bikes if I could just let the guy test ride it,’” said Bert Alanko of MBA Insurance based in Scottsdale, Ariz. “We’re going to offer a program specifically for test rides.”

Program logistics
Expected to be available June 1, this program will be available to all dealerships nationwide.
The test ride program is completely separate from the dealer’s general liability policy. Alanko notes it’ll be like MBA Insurances’ rental program.
“We’re putting the whole program under a whole different classification legally,” said Alanko. “Most dealers don’t allow test rides because they don’t have the insurance under their general liability. Even if they do, some dealers don’t want to do it because if they have a couple claims, they could lose their general liability policy, which is huge. The rules will fall under the rental laws of the state the dealership is in, which puts this policy in a completely different category than the general liability.”

New and preowned units
For a monthly premium, which will depend on the size of the dealership and the number of vehicles covered, the policy would offer up to
$1 million in liability coverage. That would protect the dealership from any allegations of negligence, says Josephine Johnson of MBA?Insurance.
The dealership will be able to offer test rides for both new and preowned units. Each customer can ride up to five vehicles for a maximum amount of time of two hours.
“We’re hoping at this point the dealer has totally qualified the consumer,” said Johnson. “They know their credit. They know the customer is serious about buying and the test ride is the clincher.” The dealers will have access to the forms online, which they can print and have the customer sign in the dealership immediately. The rider would pay an insurance charge of $10 for scooters and $20 for all other vehicles, including ATVs and on- and off-road motorcycles.
To cater to the industry, Johnson says the program can be seasonal for dealers.
“We’re not going to require they insure for the whole year,” she said. “It can only be for four or five months, whatever their top selling months are. During the down months, they can put the policy on suspend, so they don’t have to fill out a new application again.”

More data
Test rides make a huge impact on consumers’ purchasing decisions, acccording to the J.D. Power and Associates’ 2009 Motorcycle Competitive Information Study. However, most new bike buyers do not test ride a motorycle at the selling dealership. In fact, for metric buyers, they are twice as likely to test ride a bike via a friend than a dealership.