Dealers Can Now Offer a Repurchase Guarantee to Customers Via a New Service
PALISADES PARK, N.J. — For dealers who may have had to deal or sell to a customer who is worried about their ability to continue making payments, there is a new product designed to help — a Vehicle Repurchase Guarantee.
Vehicle Repurchasing Corp.'s "Vehicle Repurchase Guaranty" is administered by OSC Omega Service Corp.
According to officials, OSC is widely known for creating dealer "spot sale" insurance for Great American Insurance Co., which provides dealer customers with interim liability and physical damage insurance and the Auction Vehicle Repurchase Guaranty.
The AVRG enables wholesale auctions to provide a 60-day buy-back guarantee at 95 percent of the original auction sale price, limited by the wholesale price in Black Book.
The Vehicle Repurchase Guaranty, or VROG, can now allow dealers to sell, or give away as an incentive, a similar buy-back guarantee to their retail customers.
After a short initial waiting period, the customer can call in a repurchase request to the plan administrator and arrange to have the vehicle inspected locally by a national inspection service, at no cost to customer. However, the customer must first offer the car to the selling dealer as a trade-in.
If the vehicle has suffered no material damage, the customer will then be offered a buy-back price equivalent to 95 percent of that day's Black Book trade in value adjusted for mileage and condition, executives explained. In fact, a check will be sent directly to the customer within a few days.
"Given the overall condition of the economy, we strongly feel that this is the right product at the right time," said Gerald Zipper, a former state insurance commissioner and president of OSC, which is the program administrator.
Performance of the guarantee is covered by a major "A" rated insurer licensed in all the states. No insurance license is required for the selling dealer.
Officials said several major groups have already signed up for the guarantee, including dealer groups and lenders.
For more information on this program, call (800) 422-9788.