If you’re an insurance agent and have auto dealers for clients, you’re probably aware that these businesses are serious targets for lawsuits. Although it isn’t common, at some point, two or more parties who have claims against a dealer will band together to file suit. These parties could be an unsatisfied customer or even a lienholder.
When this happens, your clients will look to you for assistance in resolving the matter, which, even if you are the greatest in your field, can be a challenging task. With this in mind, it’s important to set a preventive plan and take the necessary steps with your dealers so they can avoid costly lawsuits.
To know how auto dealers can prevent such situations, read on below!
5 Rules for Used Auto Dealers to Avoid Lawsuits
Although having used auto dealership insurance is a must for every used auto dealer company, your client still needs to follow the five rules below. Doing so will not only help them avoid lawsuits, but will also save you the unnecessary headache of trying to resolve one.
Always Check the Vehicle Being Sold
One of the most important rules your client should follow is to always check the vehicle thoroughly they’re about to sell. This includes mechanical inspections, repairs, and other needed maintenance. Unlike new ones, used cars are susceptible to malfunction.
A car that has been crashed, flooded, or even improperly maintained can pose many issues for the dealer. Even when they’ve been restored, such vehicles can be risky to sell. Your client’s customers might end up filing a lawsuit against them if they get injured due to using a faulty car.
Therefore, always make it a priority for your clients to check any used car before selling it. If they skip this step, they might end up dealing with an expensive lawsuit.
Be Careful with Marketing Tactics
In a business, sales are everything. Even used car dealerships need to have a high volume of sales to thrive. They can accomplish this through various forms of marketing strategy. From television advertising, use of social media platforms, and even face-to-face sales, there are numerous ways to promote a dealership.
However, it’s not good to market a product without being careful. Your clients need to be upfront with what they’re selling. It’s common for companies nowadays to claim that a used car is in mint condition when it’s far from being so. While this might help them sell the product, your client can get on the bad side of their buyers if they find out that the vehicle isn’t everything it’s marketed to be.
To avoid lawsuits, make sure your clients are honest with their marketing strategy. If they advertise vehicles as “new” when they’re anything but, they’ll end up paying for it later with customer complaints or worse —lawsuits.
Be Sure to Keep Your Lines Open
Another way used auto dealers can avoid lawsuits is to always keep their telephone lines open. This might sound like an obvious thing to do, but you probably know how many business owners fail to do this.
If your client wants to prevent lawsuits from disgruntled customers, they need to keep their phone lines open in case someone calls to complain. Of course, we can never predict the future, and the chances of a customer purchasing a faulty vehicle can still happen. However, being ready to answer their concerns can be a lot better than not helping them at all.
When your client neglects this rule, it will only lead to more angry calls and complaints that might spark lawsuits later. So. always remind them that keeping their phone lines open is crucial for their business growth and protection.
Disclose Everything Before Selling
Honesty may not always be the best policy for selling, but there are times when your clients need to be honest. The best example of this is the release of a vehicle’s history report. Selling a car without disclosing its history report might seem like a smart move because it may help your client sell the car for a higher price. However, not telling the buyer about accidents and other damages that happened to the vehicle can put them at risk of filing lawsuits.
Every automotive dealer must disclose any information that the buyer deserves to know about. If they fail to do so, then their customers can file false advertisement lawsuits against them. To avoid these kinds of issues arising from your client’s lack of honesty, teach them how important it is to disclose information before selling anything.
Complaints Must Never Be Blown-Off
When someone complains to your client about a faulty vehicle, don’t let them react with, “It’s not my problem.” Doing this will only anger the customer even more, making them think that they’re being ignored or treated poorly.
Even if your client believes that the buyer doesn’t have a case against them, it never hurts to take down their information and investigate the matter. If they find out that the purchaser is right, then they can apologize and repair the vehicle as a token of goodwill. Otherwise, your client can show that they’re willing to at least consider their buyers’ concerns which is better than ignoring them completely.
You see, not treating complaints properly can lead to serious lawsuits later. Therefore, it’s important for your clients to take every complaint with professionalism and kindness.
About K2 Insurance Services
Your used auto dealership clients will benefit considerably from the risk protection that K2 provides. Apart from the full range of insurance coverages, K2 also offers an ACH payment system that bills your clients directly. Call us today at (866) 429-1638 to find out how you can partner with the leading name in auto dealership insurance.
