The ABCs of TLP (Total Loss Protection) - AutoSuccessOnline
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F & I Solutions

The ABCs of TLP (Total Loss Protection)

With a TLP product, revenue is generated throughout the term of each contract and there’s direct tie-back for vehicle replacement.

Michael LaMotta is the founder and CEO of DOWC, among the fastest-growing service contract providers and administrators in the U.S. A 2021 Dealers’ Choice Diamond Award winner, DOWC offers customizable F&I products and expertise in compliance, as well as a full suite of technology designed to optimize productivity and expedite claims adjustments, processing and reporting.

Superior F&I products are those that offer clear benefits and valuable coverage that will, in the event of a claim, provide customers with a positive experience that builds their allegiance to their selling dealer. Total loss protection (TLP) is just such a product. Let’s take a closer look into how it works and the ways it can benefit both customers and dealers.

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What is Total Loss Protection?

A vehicle that suffers significant damage in an accident (resulting in repair costs being more than the vehicle’s actual cash value) or is stolen and unable to be recovered, may be deemed a total loss by the owner’s insurance company.

TLP coverage helps relieve the burden of replacing a vehicle deemed a total loss because of accident or theft by providing a credit to the customer toward the purchase or lease of a replacement vehicle from the selling dealer.

How TLP is Different from GAP

Both guaranteed asset protection (GAP) and TLP are coverages that come into play in the event of a total loss resulting from an accident or theft. The difference lies in the type of financial benefit provided.


A GAP waiver covers a portion of the difference between the insured value of a vehicle and the balance of the loan or lease that the owner must repay. In essence, it pays off any amount still due after insurance settlement on the matter.

TLP, on the other hand, provides financial relief toward the cost of a replacement vehicle. Coverage takes the form of a credit to the owner, up to the coverage maximum benefit, toward a vehicle purchase or lease from the selling dealer.

The Protective Element of TLP 

It is important to select a TLP program that includes a protective product designed to deter theft or aid in stolen vehicle recovery. Options include:
• UV body panel labels that leave a permanent and unique code on the vehicle that is visible under UV light, deterring theft and allowing law enforcement agencies to identify the owner of a recovered vehicle.
• GPS tracking devices that can be installed (some using the OBDII on-board diagnostic port) and that transmit a vehicle’s location using GPS satellites, allowing immediate location tracking and aiding in recovery.


In the event that the installed theft protection product fails to prevent the theft of the vehicle, and it is not recovered and thus deemed a total loss, the TLP’s financial benefit is triggered.

Valuable Benefits for Customers & Dealers

For dealers offering a total loss protection product, the value is two-fold: revenue generated throughout the term of each contract as well as the direct tie-back for vehicle replacement per the terms of the agreement.

For customers, added theft protection brings peace of mind from day one of ownership. And in the event of a total loss, the financial benefit helps protect their budget and get them back on the road in a vehicle acquired from their trusted selling dealer.

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