Canada's Walkaway thrives by easing risk of buying car
By John McCrank
TORONTO (Reuters) - A company that allows consumers who lose their jobs to walk away from their car payments is one of those rare businesses that's thriving thanks to the recession that has gripped the North American economy.
Privately owned Walkaway, which operates in the United States, Canada and Australia, sells a form of insurance that takes its customers off the hook in the event of a job loss, a disabling injury or some other "life-changing" event.
Say your mortgage payments have ballooned and you are in danger of defaulting. Simply turn in your keys and, well, walk away scot-free from your car obligations. No strings attached.
Vincent Beretta, founder and chief executive of Walkaway Canada, said the idea of marketing so-called vehicle return insurance through car dealerships came to him about 10 years ago, and it was immediate hit.
But with the ranks of the unemployed swelling and consumer confidence in the tank, the good times have gotten even better for the company. By taking away much of the risk in making a big-ticket purchase, its insurance also may help North America's decimated car industry sell more vehicles to nervous consumers than they might have otherwise.
"Dealers resonated with it immediately and we had almost 30 percent of the market (of Ontario's auto dealers) within 18 months," said Beretta in a recent Reuters interview.
Doug Phillips, a salesman at Tony Graham Toyota in Ottawa, said customers have taken to the program and it helps him sell more cars.
"When the times are tough like they are now, they know that if something happens and they lose their job, they are going to be protected and it won't hurt their credit rating," he said. Continued...