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Sitting in the caryard with his pregnant wife Ryan Broom felt keen pressure to make the right decision when buying a car for his family.
He had agreed to outlay a bit more than $30,000 for a Nissan X-Trail but then the salesman started to push on insurance.
Broom eventually spent another $4000 buying Guaranteed Asset Protection (GAP) Insurance as well as Tyre and Rim Insurance (TRI) when he bought his Nissan X-Trail in April 2015.
These are the products which the corporate watchdog has now labelled as duds and pulled $122 million in refunds out of the industry on behalf of customers.
Broom did not intend to buy any insurances when he walked into the dealership. He held a stable job and was confident in his ability to pay off any unexpected costs that might come with his car.
“The scenarios the guy gave were very emotive and made me feel like I was not being responsible if I declined the GAP cover,” Broom says.
“The scenario he gave me was – ‘What if the government changes and you get sacked? What happens then?’ Now that I think about it, the whole thing was pretty bad.”
GAP insurance covers the difference between the amount the customer owes on the car loan, and the amount the car is insured for under comprehensive car insurance. TRI covers the cost of repairing and replacing wheels tyres and rims if they are punctured or suffer a blow out.
“They sell these things to you by packaging it up with the whole finance deal, so it doesn’t seem like it costs that much, so why not? In hindsight, why would a brand new car have faulty tyres and rims?,” the 30 year old from North Sydney says.
In the latest of a series of investigations, the Australian Securities and Investments Commission on Wednesday said insurance giants Allianz and Suncorp would refund a combined $62.8 million in premiums to more than 100,000 customers, after selling insurance via car dealers that was of little or no use.
ASIC said Allianz would refund $45.6 million to 68,000 customers, and Suncorp $17.2 million to 41,228 customers.
Fairfax Media spoke to several unhappy customers who had bought the insurance products.
Peter Copleston from Sydney believes he might also be one of the 68,000 Allianz customers who will be refunded.
The 73-year-old bought a 3 year extended warranty called ‘Auto Assure Protect Plus’ in July 2015 for his Mercedes Sedan.
He was intending to purchase the standard 3 month warranty, but after some persuasion from the sales team, forked out $1450 for the plan.
The problem was, his coverage only has a maximum pay out of $3000 per claim.
“I paid almost half of that already,” Copleston says, “so I felt like I was sold something not very useful.”
Overall, Copleston found the ordeal to be very disingenuous, “it made me feel like I’d been conned.”
Sharyn, a private investigator from Melbourne, who asked for only her first name to be used also complained about pressure tactics.
“They very smoothly conned me,” she says of the time when she was purchasing her new Holden Cruze a few years.
Sharyn has already received a refund for several thousand dollars after complaining about the value of the product.
“I said to them: ‘three generations in my family has bought cars from you, if this is how you treat your local customers, that’s disgusting.”
Source: Sydney Morning Herald online