Demo Risk

Demonstrator Risk Management

Demonstrators have long been an important part of the auto business. They have been useful in attracting employees and are a valuable benefit that many employees appreciate.

However, besides being expensive, they can also be a Dealer's worst nightmare.

This has forced many Dealers to reconsider the cost / benefit ratio of providing demonstrators.

70% to 80% of all lost dollars paid out by Garage Liability insurance companies is directly attributable to sales Demonstrators!

It can also affect your workers' comp costs even when the driver is off duty.

A Virginia court ruled that an employee who was driving on personal time and got into an accident was entitled to Worker's Comp benefits!

They ruled he was working because part of the reasoning behind issuing a demo is to show the car, even off-hours.

Therefore, since he was driving the demo, the court ruled he was on the job!

On average, Demos cost dealers MORE than $600 per month per car!

A dealer plate is not just a piece of metal.

It represents ALL DEALERSHIP ASSETS when it is on the road.

Do you trust all Demo drivers with your entire store?!

To address the Demonstrator issue at your store, you have eight fundamental options.

  1. Control:
  2. This means you have chosen to keep demonstrators but want to do whatever you can to minimize loss.

  3. Demo Agreement:
  4. This is a contractual agreement between the company and an employee who is issued a demo.

    It can contain any and all guidelines you feel are appropriate.

    Strict management follow-up on such contracts is critical to enforcement.

    For a sample Demo agreement: Click Here

    Check with your attorney as to its enforceability.

  5. Reduction:
  6. This means you are now committed to reducing the number of dealership demonstrators on the road.

  7. Grandfathering:
  8. This method simply means new people coming on board do not get demos. It is the easiest way to transition from your old Demo policy to a new one.

  9. Cash Stipend:
  10. Instead of providing a vehicle you provide cash replacement. We strongly recommend you complete a Demonstrator cost analysis before considering this since what you are actually paying for demos is typically significantly more than you think!

  11. Voluntary Option:
  12. This is presented to the staff such as "We are now offering _____________ as an option to getting a demo".

  13. Elimination:
  14. Same options as discussed in Reduction section only mandatory changes take place.

  15. Leasing:
  16. You may consider leasing a vehicle for the employee, however it will be registered, maintained, and insured on a personal basis.

Driving Records MVR reports.

A Motor Vehicle Driving Record check needs to be performed on all incoming employees and annually on all existing employees.

Pre-placement Drug Testing:

This should be a routine part of your overall risk management.

For A Sample of a Dealership Driving Policy for all Drivers: Click Here

For an example of a printable Driver Responsibility Acknowledgement Form: Click Here