GAPWise
Everyone in the F&I business knows what GAP is and what it does.
But did you know that this product is more relevant now than ever before?
There is no such thing as a “cheap accident” or a “Fender Bender” anymore thanks to the increased amount of electronics, technology, and sensors in today’s vehicles. For example, a logo on a vehicle used to be just a logo. But adding a sensor behind the logo can take a replacement cost for the part alone from $51 to over $1,000! Avoidance sensors located behind the bumpers are over $1,000! And airbags will total a car just by deploying. After 20 years of declining U.S. auto accident frequency, the industry saw its first sustained increase in 2015. Factors such as lower gas prices, higher employment rates, and record car sales mean more drivers are on the road. Add to that the number of distracted drivers and the stage is set for more accidents. Higher lender advances and longer loan terms mean that more of those total loss accidents result in a gap between what the insurance check is and what the payoff is. And if you are thinking, “how much can the GAP be?” in the first half of 2018 the average GAP claim was $3,400. Since these factors are expected to continue or get worse in the foreseeable future, just about every financed customer is a GAP customer.
VALUEWise Diminished Value Protection
A relatively new addition to the F&I slate of products, Diminished Value protection provides up to five years of coverage against the loss of value that occurs when a vehicle is in an accident, but doesn’t incur a total loss. Diminished vallue often results in negative equity, since the vehicle being traded can be worth 30% less than the same vehicle that was not in an accident. Adding VALUEWise can increase the trade-in value of the vehicle by up to $4,000.
Many Finance Managers offer both GAP and VALUEWise to their customers, often selling both. And Diminished Value protection can be offered to cash customers as well as finance customers.