Dealer Car Manager has teamed up with insurance giant CGU to offer dealers an opportunity to profit from courtesy cars, while minimising the expense of demonstrators and company vehicles.

The service is designed to address the problems of ensuring adequate insurance cover is in force and minimise administration for dealership staff.

Speaking on the company website, managing director Dennis Ryan said dealers often had to accept higher insurance excesses to keep premiums in check. “The problem with this is we must then insist customers self-insure when cars are loaned out, which adds to the already weighty administration workload,” he added.

Mr Ryan believed the service would “dramatically improve management control” over the business, enhance customer service and enable dealers to take advantage of an “additional profit opportunity”.

DCM provides a fleet management system on CD-Rom for £75 a month, which allows dealers to track their vehicles. Customers who require a courtesy car pay a £10 administration fee for full CGU cover.

Dealers pay a daily charge of between £4-£6 a car, depending on location and whether CGU provides motor trade insurance to avoid liability for any accident that happens while the car is with the customer.

Any car insured for 10 days in a month can be covered free of charge for the remainder of that month.

DCM estimates that if a dealership is 75% efficient in using its courtesy vehicles, it could make more than £100 profit on each vehicle a month.