09 Apr GAP Insurance – Good for Dealers AND Consumers.
For the states that allow it, GAP insurance is one of the most profitable and toughest to sell in the F&I office. It’s a valuable product, especially in today’s new car buying environment.
With the average new car price climbing to over $40,000 and the average payment creeping up to nearly $500 per month, GAP insurance can help keep buyers from holding the bag after a total loss.
There are distinct advantages to the dealership and to the consumer when offering a robust GAP protection plan.
Let’s take a deeper dive into why the right kind of GAP plan can be a homerun for everyone:
For the Dealership –
If a dealer is offering GAP insurance to every customer, it’s a huge windfall for the bottom line. If the backend cost per policy is low, GAP can be sold with a healthy margin and can still be a powerful value-add for the customer to protect them from financial loss.
Dealers who work with a provider that offers both reinsurance AND ‘walkaway’ or non-reinsured GAP, they have the advantage of tailoring their offerings in a way that fits them best. TruGap, powered by TruWarranty, offers such a plan.
For some dealers, walkaway GAP can add as much as $50k per year extra profit. Add to that support from an A-rated insurance carrier, best-in-class claims adjudication, and digital remote deployment…and you have a GAP product that can be easy to sell and easier still to manage.
GAP should not be a tough sell and a provider that has mastered both the reinsurance and non-reinsurance piece gives your store the best of both worlds at margins that will keep profits steady year after year.
For Your Consumer –
Consumers who are committing to an expensive new car (which, let’s be honest…most of them are) rarely think about the rare but very possible chance that they could wreck the car and not get enough from the claim to pay off the existing loan balance.
Who wants to picture that?
But GAP insurance, when offering the maximum in benefits, can mean everything to a car owner who doesn’t have the discretionary funds available to pay off the outstanding loan balance.
When you offer TruGap, your customers get a level of protection that makes it an easy sell –
- Up to $1k deductible reimbursement
- $50k max benefit
- For new AND used cars
- Up to 96 month term
- Approved by all major lenders
- Commercial vehicles, too.
Your customers also get coverage from a provider that is reinventing the way all F&I products are offered and administered behind the scenes.
GAP has been controversial in the past and only in the last few years has been more highly regulated to avoid sketchy sales practices. Make sure you are viewing GAP as a win for both the dealer and the consumer.