Ford is giving new car buyers a way to save money on insurance now that millions of Americans are working from home and driving less than they were before the coronavirus hit the U.S.

The automaker said Thursday it is partnering with start-up insurer Metromile to give drivers easier access to the company’s pay-per-mile insurance offering. When drivers sign up on Metromile’s app or website, the odometer on their new Ford will immediately connect to Metromile’s software, which will start tracking miles.

Car insurers have faced controversy in the six months since Covid-19 forced offices around the country to close and put an end to live events and group gatherings. Major insurers said in April that they would start providing refunds, credits or rate cuts to customers because of the plunge in drive time, but a number of class-action lawsuits have been filed by consumers who said they should have been given bigger discounts.

“Having a product that helps people save money in a time like this is really important,” said Metromile CEO Dan Preston. We “build products catered to specific individuals as opposed to insurance products built for classes of drivers.”

The announcement comes a day after Ford said it’s looking to slash at least 1,400 jobs, as it cuts staff in underperforming areas while investing in new technologies.

Founded in 2011, Metromile allows anyone to sign up for its product online, regardless of what kind of car they drive. Preston said the company targets the two-thirds of people who drive less than 12,000 miles per year, which he calls the break-even point. In other words, anyone who drives less than that should save money with Metromile versus traditional insurers.

Thursday’s announcement said eligible Ford owners can save $741 a year on average, based on a recent survey of Metromile customers.

Preston said Ford is the “most forward-looking” of the major manufacturers in baking the product into its cars, but he expects other partnerships to emerge. The company says the number of Teslas insured by the company has grown 191% in the last two years.

To date, Metromile has tracked the number of miles driven through a separate device that plugs into the car’s diagnostics port. The new embedded Metromile offering is available only on new Ford cars that have connected systems open to outside developers. That includes most Fords from the 2020 and 2021 model years, the companies said.

Metromile, based in San Francisco, is generating over $100 million in annual revenue, Preston said. Sales plunged in the early days of the coronavirus because driving went way down. However, in the subsequent months many people went back to work and chose to drive instead of taking public transportation. Metromile also attracted new customers who were driving less and looking for cheaper insurance than they were getting from Allstate, Geico and Progressive.

“A lot of changes are very likely not temporary,” Preston said.

Metromile has raised about $300 million in private capital, including from insurers Tokio Marine Holdings and Intact Financial, and venture firms NEA and Index Ventures. Insurance-technology companies are still trying to prove that they can employ software, algorithms and an upgraded user experiences to bring down costs for consumers while also generating a profit in a low-margin industry.

In July, insurance-tech company Lemonade, which offers insurance to renters and homeowners, held its stock market debut. The company has a $3 billion market cap. Revenue more than doubled in the second quarter to $29.2 million, but Lemonade still reported a net loss of $21 million.

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Online insurance marketplace Pretected has published a new report outlining that ever since the COVID-19 pandemic struck the US, there has been a surge in demand for online auto insurance quotes.

According to the insurance comparison website, there has been an average increase of 147% in online auto insurance quote requests between the periods of March-August 2019 and March-August 2020.

Pretected noted that this trend may sound counterintuitive at first; after all, driver activity dropped considerably during the pandemic, and some believed that drivers would be less bothered with their current coverage during this period.

“But it actually makes a lot of sense when we see the struggling economy as more and more people are looking for every possible way to save a couple of extra dollars,” Pretected commented.

The website also took note of which US states saw the biggest increases in auto insurance quote requests. California leads the pack with the highest increases in online requests for quotes, followed by Georgia, then New York. All three states also happen to be among the top states with the most COVID-19 cases in America, Pretected pointed out.

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Mercury General Corp. on Monday reported second-quarter earnings of $228.2 million.

The Los Angeles-based company said it had net income of $4.12 per share. Earnings, adjusted for investment gains, were $1.86 per share.

The auto insurance company posted revenue of $1.01 billion in the period. Its adjusted revenue was $847.4 million.

Mercury General shares have decreased 12% since the beginning of the year. The stock has fallen 24% in the last 12 months.

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Washington Insurance Commissioner Mike Kreidler reached out to insurance company CEOs in a letter and urged them to stand behind their recent pledges to end discrimination and racial inequities by supporting his proposal to ban the unfair practice of using credit scoring in setting prices for auto, homeowner’s, renter’s and life insurance.

“Many leaders in the insurance industry have recently pledged to eliminate inequity,” said Kreidler. “My proposal is an opportunity to convert these pledges into action. People will feel the economic impact of the coronavirus pandemic for years to come. It will be extremely hard for many people to improve their credit scores or even maintain their current score. They should not be penalized for circumstances that are no fault of their own.”

What we know about income and racial disparity in Washington, according to Kreidler:

Since March 2020, more than 1.2 million people in Washington filed for unemployment. That number is 89% higher than during the peak of the great recession from 2007-2009.
In 2018, 8% of whites in Washington lived in poverty, compared to 20% of Blacks and 17% of Hispanics.
Washington Insurance Commissioner Mike Kreidler
Washington Insurance Commissioner Mike Kreidler
Kreidler is asking the Legislature to amend two state laws that allow insurance companies to help determine rates for consumers in Washington. The companies can continue to use other factors to set premiums, including age, gender, claims history, driving record, where a person lives, marital status and more, he noted.

His proposal will be sponsored by Sen. Mona Das, D- Kent, and Rep. Steve Kirby, D-Tacoma.

“Insurers believe there is a correlation between someone’s credit score and the likelihood they’ll file a claim in the future,” said Kreidler. “They believe that if you are reckless with your credit, you’ll be reckless in managing your finances and maintaining your home. But many people see their credit scores drop when they lose their jobs or suffer from a serious illness. It’s more likely the correlation has less to do with risk and more to do with your income and what wealth you’ve accumulated.”

Kreidler has sought a ban on insurers’ use of credit scoring several times since 2001 and succeeded in limiting its use. Today, insurers cannot use credit history to deny coverage or cancel a policy. They are also prohibited from using certain credit factors, such as medical bankruptcy, to determine how much you pay.

“Credit scoring institutionalizes racism and holds down people with low incomes,” said Kreidler. “I believe the insurance industry leaders do not want to be on the wrong side of this issue. I think they’ll recognize that relying on such arbitrary data as credit scoring at a time our country is coming to terms with extreme economic hardship and its history of racial disparity does not enhance their corporate image.”

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Dealers ‘have an issue now, which is that we don’t have enough inventory’

NAPERVILLE, Ill. — At the height of the coronavirus pandemic in mid-April, used-car dealer Alex Tovstanovsky had vehicles jammed six rows deep on his lot in the western Chicago suburb of Naperville.

But the seeming oversupply was not a mistake.

Despite plummeting sales at his store, Prestige Motor Works, Tovstanovsky was betting on a recovery, buying dozens of cars in early April as auction prices for used vehicles dropped.

That bet is now paying off. Tovstanovsky can offer cars cheaper than local competitors, and his sales jumped 38% in May versus May 2019.

“This is an election year, and I felt the Trump administration and the Republicans in Congress would do whatever it took to keep the economy strong,” Tovstanovsky said.

Rising demand has now pushed used-vehicle prices about 20% higher than when Tovstanovsky made his bet.

“I just wish I’d bought more cars when prices were low,” Tovstanovsky said.

As America shut down in March to combat the spread of COVID-19 and its economy tanked, U.S. new-vehicle sales plummeted. Sales were down around 30% in May, an improvement from a 47% drop in April.

But used-vehicle sales have rebounded faster.

Dealers are now competing to buy vehicles, even as the U.S. economic outlook remains uncertain.

“We actually have an issue now, which is that we don’t have enough inventory,” said George Arison, co-CEO of online used-car seller Shift. Shift’s sales rebounded to pre-COVID-19 levels by late April.

Americans typically become more frugal and favor used cars in uncertain times. Cars remain a vital commodity in a country where getting to work without a vehicle is impossible in all but a few large cities.

Rising used-car sales increase competition for automakers who must sell new cars to offset cash burned during a two-month shutdown for the North American auto industry.

According to Cox Automotive, new-vehicle sales for the week ending May 28 were down 28%, but sales of used vehicles were up 6%.

According to Cox unit Manheim, wholesale used-vehicle prices rose 5.74% in the first half of May from the previous month.

Carmax Inc, the No. 1 used-car dealer, has already called back about two-thirds of the 15,5000 employees it furloughed in April.

“We expect to come out of this in a position to take advantage of the resiliency of the used-car industry,” said chief marketing officer Jim Lyski.

While dealers say access to financing is plentiful, Wells Fargo & Co said this week it will stop offering loans to most independent dealers due to economic uncertainty.

‘Melting ice cubes’
Used-car dealers say recent customers have ranged from deep subprime borrowers using their $1,200 federal pandemic relief checks for a downpayment, to prime borrowers with pristine credit who saved money working from home since March.

“I’ve seen a lot of downpayments this month of exactly $1,200,” said Scott Allen, owner of Auto Land in Fort Worth, Texas, which sells older used vehicles. After being closed for nearly a month from March 23, Allen’s sales in May were up 55% over his average for that month.

The U.S. used-vehicle market has distinct layers. At the top, in terms of price, are vehicles returned after short-term leases that look nearly new. Those are a concern for the industry.

More than 4 million off-lease vehicles are due to return to the market this year, at a rate of around 340,000 per month.

Automakers and their finance arms are trying to slow the pace at which those vehicles hit auctions to avoid flooding the market.

KAR Auction Services Inc has bought 200 acres (0.81 square kilometer) of land and is seeking another 100 acres to store cars for major customers.

Tom Kontos, chief economist at KAR, which alongside Manheim dominates the U.S. used-car auction market, calls these vehicles “melting ice cubes.” They lose value every day, and cannot be held back for long.

Franchise new-car dealers are driving demand for used cars to fill lots short of inventory because the coronavirus shut down assembly plants.

Ten of the top 15 models sold at U.S. franchise dealers were used rather than new between May 22 and May 28, according to automotive marketing platform PureCars.

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This year began with auto insurance buyers shopping around more than ever but by mid-March shopping began to slow down before returning to normal a few weeks later.

According to the data firm LexisNexis, shopping has closely mirrored other pandemic developments — from a marked decrease correlated to the stay-at-home orders to an increase that appears to coincide with the timing of the federal stimulus checks. Premium rebates offered by many auto insurers also had an effect.

U.S. auto insurance shopping showed an average year to year growth rate of +7% from January through early March, according to the LexisNexis Insurance Demand Meter, a quarterly analysis of shopping volume and frequency, new business volume and related data. This began to change on March 16, when shopping declined to -11% year-over-year growth, the lowest level in more than a decade. Activity rebounded a few weeks later, returning to an average growth rate of +8%.

Similarly, new business volume growth has decreased at unprecedented rates, shrinking -10% in March and -14% in April. For Q1 2020, this represents a decline of 52% compared to Q1 2019 and tracks to a historical five-year average decrease, according to the meter.

“The year started with the highest shopping rate ever, with 41% of all policies having been shopped in the past year. But it became clear that COVID-19 started to affect auto insurance shopping activity in mid-March,” said Chris Rice, senior director of data science, insurance, LexisNexis Risk Solutions. “Not only did shopping volumes decrease, but new business volumes dropped even more as most carriers offered short term rebates to existing customers, making it difficult for consumers to find lower premiums with a new carrier.”

The LexisNexis meter shows that among the states with the highest coronavirus cases, New York’s growth rates dropped the fastest and bottomed out at -26%. Countrywide, shopping volumes dropped as much as -31% to as little as -6% compared to Pre-COVID volumes.

The pandemic has had the biggest impact for shoppers ages 35 and younger with growth rates down by more than -20% among this demographic group. Shoppers ages 55 and older kept on pace and their shopping even surged by 32% around the time of stimulus checks. Since then shopping has leveled off to the pre-COVID growth rate, according to the LexisNexis data.

Across the three types of insurance shopping channels – direct, exclusive agent and independent agent – the direct and independent agent channels took the biggest hits during the worst of the pandemic at -26% and -24% respectively. By contrast, exclusive agent carriers saw a far more modest decline of -9%.

“The U.S. auto insurance market has shrunk as a result of the pandemic, but carriers giving money back and the pause in cancelling policies for non-payment have also likely helped stabilize these shifts and could help it rebound,” said Tanner Sheehan, associate vice president of auto insurance at LexisNexis Risk Solutions.

Sheehan said insurance shopping and new policy purchases can be seen as barometers for broader consumer behavior as well as reflections of specific insurance market conditions relating to rate levels, advertising spend, and changes in mobility.

Rice said the next few months will reveal if the market balances itself due to changing unemployment rates and advertising.

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This example was used by Pirelli to test tires

Collectors who find limited-edition hypercars with a multi-million-dollar price tag a little bit too stodgy will soon have a rare opportunity to add a real Formula One car to their fleet. Toyota donated the first example of the last car it built to compete in the series to a charity auction whose proceeds will go towards COVID-19 relief.

Wearing chassis number 01, this TF109 participated in a battery of tests leading up to the 2009 Formula One season. It was driven by several professional pilots, including Henkie Waldschmidt, Jarno Trulli and Timo Glock, but it never lined up on the starting grid of a race. Instead of stuffing it in a dimly-lit museum, Toyota passed the TF109 to Pirelli who used it as a high-speed test mule for tires. It was stripped of its red and white livery and put in the hands of well-known pilots (including Romain Grosjean) until it finally retired in 2011 after covering about 30,000 kilometers (approximately 19,000 miles), which is enormous for a Formula One car.

There’s little evidence chassis number 01 has moved much since 2011. It’s being sold as a complete car and it’s still fitted with its 2.4-liter V8 engine, but we don’t know whether or not it runs. That’s likely of little interest to its future owner; starting a Formula One car is a dauntingly complicated task, and maintaining it requires a full team of technicians. It’s more likely to become a rolling work of art than to start a second racing career.

It’s difficult to put a value on a Formula One car. It’s not like you can browse Bring a Trailer until you have an accurate idea of how the last 27 examples sold have performed. RM Sotheby’s hasn’t provided a pre-auction estimate, but we wouldn’t be surprised if bidding crosses the seven-digit mark, especially considering the proceeds from the sale will be donated to the International Federation of Red Cross and Red Crescent Societies.

RM’s Race Against Covid auction will take place online — where else? — between June 15 and 22. Eight lots have been detailed as of writing, including the aforementioned TF109 plus a racing suit worn by Sebastian Vettel in 2019, a bundle of equipment signed by top drivers like Lewis Hamilton, and a day in Ferrari’s racing simulator. RM previously announced the auction will include over 60 lots, so there may be other cars up for grabs.

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Detroit inquired about the vans after becoming aware of Honda-modified vehicles used in Japan.

American Honda delivered 10 Odyssey minivans to the city of Detroit today, each one modified to enable the safe transport of potential COVID-19 patients to medical locations for testing and/or treatment. Engineers in Raymond, Ohio, modified the ventilation systems in the Honda Odysseys to maintain an air-pressure differential between the front and rear seats, as well as installed plastic barriers behind the front seats with an aim to better protect drivers and health-care workers from becoming infected with the novel coronavirus.

Honda engineers in Japan in April designed the system for domestic-market minivans to be used to transport coronavirus patients in the Tokyo area. News of the JDM Honda minivans led city of Detroit officials to contact the automaker about the potential for such a system in the U.S. As of Monday, Michigan counted 43,950 confirmed coronavirus cases, the majority in the Metro Detroit area, making it a hot spot for the disease in the United States.

The engineers at Honda Research & Development in Ohio brought the Odyssey minivan modifications from initial concept to completion in less than two weeks, the automaker says. The North American market Honda Odyssey is a larger minivan than the JDM minivan used in Tokyo.

Honda joins other automakers in assisting during the pandemic, which has seen global vehicle production largely halted for several weeks. Ford, for example, is using some of its facilities to produce medical ventilators, masks, face shields, medical gowns, and other equipment, as has General Motors.

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Our roads are pretty empty right now without the daily errands, school runs, and commutes we’re all so used to. In some of the U.S. ‘s most traffic-clogged cities, the lack of snarls is practically unprecedented.

For example, according to the New York Times, average rush-hour speeds on the Brooklyn-Queens Expressway have increased a staggering 288 percent since stay-at-home orders were put into effect there. The Los Angeles Times reports drivers of the infamously awful 405 are averaging more than 70 mph when just a few weeks ago they would have been traveling at perhaps 40 mph.

Empty roads are great. They make commuting less onerous and allow you to enjoy your car. What’s not great the righteous few who use them as an excuse to quench their need for speed while everyone else is being responsible and staying home (or still driving the speed limit if they must be on the road). Case in point: Another report from the Los Angeles Times states traffic citations for speeds in excess of 100 mph are up 87 percent.

It’s not just in California. It’s happening all over the country. Ohio has reported the same phenomenon and so has Georgia. Then there are the goons who set a new cross-country “Cannonball” record racing from Los Angeles to New York.

This needs to stop.

Driving your (suddenly clear) favorite roads at life-endangering speeds isn’t just reckless, it’s stupid. Getting 15 minutes of fame from a sick YouTube video isn’t worth endangering countless other people. In fact, nothing is.

Less than a week ago, two men were killed in Oakland after driving at 100 mph and crashing into the back of a big rig. They also weren’t wearing seatbelts, which is not only seriously dangerous but illegal in California and 48 other states. Their friends and relatives are left behind to pick up the pieces all because two guys placed selfishness over smarts at 2 a.m.

Now let’s say these two guys were lucky enough to have survived that wreck. These men would no doubt be in serious condition and in need of immediate medical attention and trauma care, which puts additional—and unnecessary—strain on a hospital system already terribly overstressed and understaffed during a global health crisis. It’s all entirely avoidable.

If you want to drive fast, go to your local drag strip or take your car to a track; if they’re closed for now, wait until they’re open. Put your vehicle and your skills to the test in a closed, safe environment to see if you’re really as fast as you think you are. Odds are, you probably have some work to do. We can’t all be Randy Pobst.

If you’re reading MotorTrend, you probably love driving as much as we do. We’re fortunate enough to test some of the quickest cars to ever hit the road. But we test our cars on a track and we use closed roads to film. Those fancy burnouts and drifting shots you see in our magazine and on our website, as well as on the numerous shows on the MotorTrend App, weren’t done while putting anyone in danger who hadn’t specifically assumed the risk.

This isn’t to say we at MotorTrend are perfect drivers. We’ve been caught for exceeding the speed limit in the past, and have paid the fines for doing so. But we also realize that the street is not a racetrack. We know and respect that a love of speed is far less important than the safety of others on the road.

So do everyone a favor and cut out the ridiculous speeding. Pay attention to the road (including putting down your phone), obey all traffic laws, and wear your seatbelt. It might save your life—and someone else’s, too.

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After shutdowns in China, Europe, the U.S. finally halts its car factories.

The chips are falling. As communities and whole countries go into lockdown, and people are unable to go to work and have stopped buying cars, more auto plants are closing temporarily for both health and economic reasons and that includes key facilities in the U.S.

The initial impact was felt in China, which was the first country to experience the COVID-19 coronavirus, the first to impose quarantines, the first to close plants and the first to see dramatic sales falloffs of about 80 percent for most automakers. China is now restoring production. Next came Europe, and the auto industry there is feeling the pinch. FCA, Ford, Ferrari, Daimler, Lamborghini, and others have idled European operations.

Rolls-Royce Motor Cars said today it will suspend production at its Goodwood plant for two weeks starting March 23, which will be followed by the previously planned two-week Easter shutdown for maintenance. The moves are in keeping with the U.K. government measures to slow the spread of the coronavirus. “This action has not been taken lightly, but the health and well-being of our exceptional workforce is first and foremost in our minds,” said Torsten Müller-Ötvös, CEO of Rolls-Royce, in a statement. “We are a tight-knit community at the Home of Rolls‑Royce and I have no doubt that our resilience will shine through during this extraordinary time.” He also apologized for any inconvenience to customers.

But What’s The Impact Here In The U.S.?
Now it is the U.S. ‘s turn. The United Auto Workers (UAW) union wanted General Motors, Ford, and FCA to shut down their domestic plants for two weeks. The Detroit Three and UAW formed a joint task force to increase safety and health protections for factory employees and help slow the spread of the novel coronavirus. It has been a fast-moving series of decisions. After lengthy negotiations, the automakers initially agreed to rotating partial shutdown of facilities, extensive deep cleaning between shifts, longer periods between shifts, and extensive plans to avoid member contact. “They will be working on shift rotation to minimize risk,” the UAW confirmed Tuesday night.

But by Wednesday afternoon things had escalated further. GM and Ford put out news releases saying they would temporarily suspend manufacturing in North America until at least March 30.

“We have agreed to a systematic, orderly suspension of production to aid in fighting COVID-19/coronavirus,” said GM Chairman and CEO Mary Barra. “We have been taking extraordinary precautions around the world to keep our plant environments safe and recent developments in North America make it clear this is the right thing to do now.” She said she appreciated the teamwork of the UAW “as we take this unprecedented step.” GM will take down the plants in an orderly fashion. Each facility will be told how they fit into the cadence.

Ford will take down its plants in the U.S., Canada, and Mexico, after the end of shifts on Thursday and they will remain down through March 30. Ford closed its Michigan Assembly Plant Wednesday morning after an employee tested positive for the coronavirus.

FCA later chimed in to say it will cease production at North American plants with some closing as early as today. All will be down through the end of March at which point the automaker will re-evaluate. CEO Mike Manley visited a number of plants this week to better gauge the best course of action for employees.

Honda today said it will stop making vehicles in the U.S. for six days, a loss of about 40,000 vehicles that would have been assembled from March 23 to March 31. The action affects vehicle assembly plants as well as engine and transmission plants. Affected plants are in Ohio, Indiana, Alabama, Canada and Mexico, covering a wide swath of models.

Some North American plants have already experienced hiccups with worried workers walking off the job. While most did not impact production, the FCA plant in Windsor, Ontario, stopped making minivans for 24 hours due to a work refusal. Volkswagen closed its Chattanooga plant for a day this week to give it a deep clean and to help employees find child care with many schools closing.

Is Tesla Essential?
Tesla did not stop production at its Fremont, Calif. plant even though six counties in the San Francisco area are under a shelter-at-home order. That prompted the Alameda County sheriff to declare in a tweet that Tesla is not an essential business which means it can “retain minimum basic operations” but could be forced to close some of its operations, including the plant in Fremont that makes the Model S, Model X, Model 3 and Model Y.

Tesla CEO Elon Musk sent an email to employees on Monday saying he would be at work but they do not need to come to work if ill or uncomfortable.

Availability of parts will also determine how long plants can operate. Ford was forced to stop production of the Ford Explorer, Lincoln Aviator, and police vehicles, at its Chicago Assembly Plant for about 24 hours when it could not get enough seats from a Lear plant where two workers tested positive for the virus and the parts plant was closed temporarily.

Dealers are also shutting their doors although some are keeping the service bays open, deeming them an essential service.

The Economic Hit To The Car Industry
A single week of lost auto sales in the U.S. has a huge economic ripple effect, according to Kristin Dziczek, vice president of industry, labor and economics with the Center for Automotive Research in Ann Arbor, Michigan. Sales are expected to fall off dramatically and the Center’s data shows a week of missed sales comes at the cost of about 94,400 jobs and $7.3 billion in earnings.

Most analysts expected U.S. sales to fall slightly in 2020 but now forecasts suggest it could reach double-digits if consumers don’t act on their pent-up demand and buy new cars when the world returns to more normalcy. But the crisis is not expected to be as severe as the financial downturn in 2008-2009 which resulted in bankruptcy filings by both GM and Chrysler, and left Ford teetering on the brink. All automakers made systemic changes to their operations to make them leaner and more productive to better weather future storms.

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