Buy-here-pay-here dealerships are the perfect solution for prospective car buyers having trouble securing an auto loan. Your dealership helps by setting up an in-house financing plan. However, popular as the sales model is, it is critical to protect your business and provide more value to your customers using GAP coverage. Read on to find out why buy-here-pay-here dealers should offer GAP insurance.

What is GAP Insurance?

Purchasing a car is one of your customers’ biggest purchases, second only to a house. Guaranteed Asset Protection (GAP) insurance is popular with car buyers and dealerships because it offers peace of mind.

GAP insurance covers the shortfall between what insurers pay in case a vehicle is written off because of an accident, theft, fire, or adverse weather, and the original purchase price.

For instance, a customer pays $30,000 for a truck, but it gets written off within 12 months. The insurance company may only pay out $19,000. Replacing the truck with a new one would have the customer pay the $11,000 difference.

Alternatively, if the customer has the finances to spread out the cost of the truck, they will probably get less from the insurer than what they owe the lender. GAP insurance can cover the difference. This means the car owner gets one payment from the auto insurer and another from a GAP provider – for a total of $30,000.

Benefits of Selling GAP Insurance

There are several benefits to providing GAP insurance through your buy-here-pay-here dealership – for you and your customers.

Advantages for Your Customers

Your customers must understand what GAP insurance is and how it can help them. The key benefits of offering GAP insurance to buyers include:

  • Finance pay-off – The last thing your customer wants to get stuck with is paying a finance deal for a vehicle they are not driving. Even an insurance payout can end up leaving the customer with a large bill. Getting GAP insurance covers the difference, so they can pay off the finance deal and still get a new car.
  • Protecting the investment – New vehicles are a major expense, but this investment diminishes fast because of depreciation. GAP insurance makes sure the customer receives the vehicle’s original value in case of a total loss claim.
  • Peace of mind – Customers know they can replace their car with a new one in case of a write-off.

Benefits for Buy-Here-Pay-Here Dealerships

You are in the business of selling automobiles. But offering financial add-on products gives you several advantages, including:

  • Increased revenue – A wider product range gives your dealership more ways to market its inventory, increasing revenue.
  • Boosting customer retention – Financial add-on products such as GAP insurance make sure your customers keep coming back.
  • Increase customer satisfaction – Happy customers are always willing to brag about your dealership to friends and family. Vehicle after-sales services such as GAP make your customer feel better protected and looked after, something they will want to share with others.

These are a few of the reasons why buy-here-pay-here dealerships should offer GAP insurance.

Get Started by Partnering with Vantage Finance

Most new car owners want to protect their investment and make sure that it does not leave them out of pocket, should the worst happen. Offering GAP insurance at your buy-here-pay-here dealership is an excellent way of developing and nurturing customer relationships.

Would you like to find out more about GAP insurance? Contact us today and let’s discuss your needs!