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Why Vehicle Protection Plans Are in High Demand at Dealerships Today

Supply shortages have gripped the industry, and now consumers are increasingly needing F&I products.

Tim Blochowiak is the vice president – dealer sales for Protective Asset Protection.

The automotive industry continues to look drastically different. Since the start of the pandemic, the industry has gone from sheer panic to quick turnaround, and today finds itself desperate for parts and supplies of computer chips to keep up with demand for new cars and trucks.

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Combination of high demand, along with factories that have been pared back because of supply-chain limitations, have resulted in fewer new cars on dealer lots. This means more people have been seeking out used cars and trucks when replacing their current vehicles.  

The average price paid for a new car is about $40,000, according to Edmunds.com. For used cars, it’s roughly $23,0001. While used cars tend to offer greater value for consumers, it is the supply and availability this time around that is substantially increasing the appetite for used and certified pre-owned (CPO) vehicles.

Knowing this, dealers must be prepared to offer their customers the right F&I products that are uniquely matched for used and CPO programs.

Consumers Have Unique Needs for Used Vehicles 

Consumers today have a diverse set of needs that match various F&I products. Some products stand alone, while others can be combined to better meet the consumers’ lifestyle, protection needs or budget. 

For continued success, it is critical for dealers to understand their customers’ wants and needs. F&I product providers today are now taking more of a consultative approach to understanding the dealer’s goals to properly align products and services that help dealers reach their business and financial objectives.  


The pandemic expedited the integration of digital retailing requirements for dealers. Consumers have been demanding a more digital shopping experience in the automotive space prior to the pandemic. As a result, more dealers have implemented digital retailing elements to incorporate F&I product options and education earlier in the online process for car shoppers.  

The Value Protection Plans Offer Drivers

Dealers are increasingly seeking vehicle protection plans with varying levels of benefits to help drivers properly maintain used and CPO vehicles. Service contracts cater to mechanical breakdowns, keeping drivers covered so they limit their financial exposure for unexpected repairs. Important items such as rental car coverage, roadside assistance and mechanical repairs on the engine, transmission, steering, electrical and even high-tech systems are all critical today.


Dealers are also enhancing their F&I offerings to include key areas such as tire and wheel protection, pre-paid vehicle maintenance programs, appearance plans, dent protection and windshield protection.

Theft protection is another F&I product dealers have increasingly been offering for both new and used cars and trucks. As more people have been working from home since the start of the pandemic, many are looking to keep their vehicles safe as they stay dormant in apartment parking lots for longer periods of time. Vehicle theft is not just for a joy ride anymore; crime rings use sophisticated methods to steal new and used cars and trucks as well as the personal belongings inside.


Prior to the pandemic, 21% of dealers said they were regularly selling theft deterrent products to customers. Today that number has increased to 31% of dealers2

F&I Products Today Are Increasingly Embraced by Car Buyers

F&I products have historically been viewed as a secondary aspect of the vehicle-buying process. However, especially with the rise of used-vehicle sales, more customers are now looking for dealers to help them keep their vehicles on the road and properly maintained and safe. Consumers have increasingly seen value in the protection they can find in F&I product programs and this growth looks to be accelerating. 


With these impacts on the retail market, the acceptance of F&I protection programs has great potential for sustained growth, which benefits both the dealership and the customer. Having the right mix of protection programs and educating consumers provides for a true win-win scenario in these still unusual times.   

1: https://www.cnbc.com/2021/04/16/car-shoppers-should-buckle-up-for-high-prices-and-low-inventory-.html 
2: Protective Asset Protection F&I Products Survey

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