Selling used vehicles is a lucrative but challenging business. Since you’re the sole financier initially, you stand to lose the most in case something goes wrong.
While risks are part of business and solving them is your job, you can’t fix problems as an auto dealer. For this reason, you should be aware of issues within your grasp and those that require auto dealer insurance to solve.
Here are five signals you should look out for.
1. Workplace Accidents
Because your work involves handling dangerous equipment and flammable objects, you may find your employees sustaining more and more injuries. It can be costly to pay for all your employees’ expenses after they get injured from out of your pocket.
And since employees are familiar with their rights, some may demand their workers’ compensation benefits. This means you’ll have to cater for their medical bills, lost wages, and out-of-pocket expenses for the duration they’re out of work.
So, if you keep taking funds from the business or using your cash to finance employees’ medical bills, this would be an excellent time to take auto dealer insurance. Through the general liability policy under this cover, you can clear workers’ hospital bills without having to milk your accounts dry.
Furthermore, an auto insurance policy has a workers’ compensation policy covering all expenses when the worker is out of work.
2. Damaged or Stolen Vehicles
A car dealership is one of the main targets for thieves today. Since most cars are in an open lot, intruders could see it as an opportunity to steal your used cars. Recently, an automotive dealer in Denver had eight vehicles stolen from their open lot in one night.
And similar cases seem to be coming up all around the country. So, even if you have security fences or surveillance cameras within your business premises, you’ll need to insure yourself and your business from theft.
In addition, due to the outdoor exposure, vehicles, your auto dealer could develop mechanical problems or get damaged. For example, if there’s a hail storm at night, some of the vehicles’ windows may crack or break.
Luckily, auto insurance covers all damages to your vehicles from environmental exposure and theft-related cases through the garage keepers’ liability policy.
3. Auto-Mobile Exposure
While driving tests are mandatory to confirm whether a car is suitable or not, this act could land you into financial trouble in the following cases:
Lack of Valid Licenses
If a client taking the vehicle on a test drive has an invalid license and gets caught driving on public roads, you’ll have to pay a fine. In severe cases, your car could be seized because it was an instrument in breaking the law.
An accident could occur while a client is out on a test drive. If anyone present in the vehicle during the accident gets injured, you’ll need a comprehensive insurance policy covering even the third party.
Furthermore, if your vehicle caused the accident, you must pay for the other driver’s repair and even hospital bills in severe cases.
No Auto-Dealer Plates
If you have an unregistered vehicle with no auto dealer plates and a client takes it out on a test drive on a public road, your car may be seized for breaking the law. Obtaining a dealer plate requires proof of auto dealer insurance.
4. Customer Protection
If there’s any good reason you should invest in auto dealer insurance, it ensures your customers’ safety. This is especially true if your premise has:
Lose cover floor
Lose flooring is the main reason your customers may fall and sustain injuries while looking around. If you have a showroom with a worn-out carpet, this could be a potential hazard to your guests.
In addition, unmarked slippery or uneven surfaces with your business can cause serious accidents.
If you’re open till late into the night with no ample lighting around the compound, it can cause accidents that you are liable for. Also, you may pay more if there were no lights in central traffic areas like the parking lot and sidewalks.
Since the outdoor area is where most clients walk through as they check out different vehicles, this area must be in mint condition. Suppose there are potholes around the driveway or snow and ice along the sidewalks; they can be dangerous places for your customers.
Too Many Errors
The process of leasing or buying a used vehicle is lengthy and detailed. For this reason, mistakes happen while drafting the legal paperwork. If you or your employees miss a crucial step in the process, and it has a financial impact on the client, you’ll be liable for these costs.
If you don’t have auto insurance cover and mistakes keep occurring, you could close shop from the financial setback. Through the error and omission policy, an insurance cover covers losses incurred by clients due to mistakes on your business end.
5. Property Damage
Physical structures within your compound play a crucial role in the success of your business. Not only do they shelter your automotive tools, but they also protect computers, desks, and employee property.
So, if your property gets vandalized or damaged, you stand to lose millions of dollars worth of goods. For this reason, you want property insurance in case the structural assets within your premises are destroyed or vandalized.
Get Your Auto Dealer Insurance Today
Auto dealer insurance is essential if selling used cars or any car for that matter. But the best part is once you subscribe to the plan as a whole, you have several other policies to back up your insurance claim.
However, you can also subscribe to the individual policies if you are on a budget, which is the best option when starting. So if you want to get started on your auto insurance policy today, give us a call, and we’ll help you through the process.