VC501 – The AA Company Background

Company Type: Private Limited company
Industry: Automotive
Founded: 1905 (UK)
Website: http://www.theaa.com
Parent: Acromas Holdings Ltd

Services: Breakdown assistance, motoring advice, financial services and driving school
Products: Maps, travel guides

Founding of the Company
The AA was founded in 1905. It is a leading provider of car insurance, breakdown cover, driving lessons, loans and motoring advice amongst other various services. The AA motoring trust was created following demutualisation in 2002, to continue its road safety and public interest activities.

Founded originally to help motorists avoid police speed traps in response to the Motor Car Act 1903 which required drivers to hold a licence and display a vehicle registration plate, introduced new penalties for breaking the speed limit, reckless driving and other offenses.

Growth and Expansion
The AA had erected thousands of roadside danger and warning signs by 1906 and managed road signage until responsibility was passed to local authorities in the early 1930s. The organization published its first AA Member’s Special Handbook in 1908, containing a list of nationwide agents and mechanics with free legal service the following year.

AA Patrols
AA patrols on bicycles warned motorists of police speed traps ahead. Subsequently the organization developed a coded warning system, which was used until the 1960s, whereby a patrolman would always salute the driver of a passing car which showed a visible AA Badge unless there was a speed trap nearby, doing so meant that their officers couldn’t be prosecuted for failing to salute. The AA handbook included the following message many times “It cannot be too strongly emphasized that when a patrol fails to salute, the member should stop and ask the reason why, as it is certain that the patrol has something of importance to communicate.

AA Routes and Membership
The organization introduced AA Routes in 1910, and in 1912 began inspecting hotels and restaurants, issuing AA Star Classification to those deemed to be of sufficient quality. By 1939 the AA’s membership had grown to 725,000, equivalent to 35% of all cars in the UK.

Company Campaigning
The organization led protests against petrol rationing after World War II, which was repealed in 1950. The AA campaigned for the compulsory wearing of seat belts, and for the introduction of lead-free petrol. Seat belt legislation became law in the UK in 1983 as required by the Transport Act 1981. They have lobbied successive governments over what they describe as ‘unfair motoring taxes’.

Beginnings of the Breakdown Service and Insurance Brokerage
1949 saw the launch of a nighttime breakdown and recovery service initially in London only before extending nationally. The AA Insurance brokerage service started in 1967, which is currently the UK’s largest motor insurance company.

Roadwatch and AA Relay
It began broadcasting A Roadwatch traffic reports on UK commercial radio stations the following year. AA Relay was also introduced in 1973, a service that will deliver a broken-down vehicle, its driver and passengers, luggage and trailer to anywhere in Britain.

The association was de-mutualised in 1999 and was sold to Centrica for £1 billion. In 2004 the company was sold to CVG Capital Partners after which 3,000 jobs were axed. In 2007 the company merged with Saga Group to form Acromas Holdings.

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