GM’s great, new sales incentive: Free car insurance

Hands holding a toy car

General Motors hopes it has discovered the next big thing to induce us to buy a new car: free insurance!

In a market where carmakers try to pump up sales with spiffs like free scheduled maintenance, free roadside assistance and guaranteed trade-in values, free insurance doesn't seem all that farfetched.

For now GM is running a trial of the program in the states of Oregon and Washington, according to a recent story in the automotive trade publication Automotive News.

The story explained that Washington and Oregon were chosen because they are notoriously difficult markets for GM sales, but if the program's successful GM might offer it in other parts of the country.

The policy is issued for one year through MetLife on any new purchased or leased 2010, 2011 or 2012 model.

The purchase or lease transaction must be completed and the vehicle titled in Oregon or Washington no later than September 6, 2011.

The policy's liability coverage is capped at $100,000 per person and $300,000 per accident.

It will cover the car and any driver with a valid driver's license for a year as long as the car is in the original owner's name.

What's more, here's something you don't find in a typical auto insurance policy: The policy will repair or replace a totaled vehicle without deducting for depreciation as long as it’s within that initial year after purchase and the car or truck has less than 15,000 miles on it.

As sales promotions go, this sure beats a free tank of gas or two-night trip to Myrtle Beach.

Incentives and promotions are great for the consumer, but the steady escalation of spiffs like free insurance and guaranteed trade-in values does have a potential downside.

At what point might buyers decide to sit on their hands waiting to for the next big sales gimmick?

If I were on the market for a GM vehicle, I would be tempted to wait a few months to see if GM brings free insurance to my neck of the woods.

I'm just sayin'....

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