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Financial institution borrowers expect a wide range of valuable services. In particular, they appreciate services that have their backs. For example, Guaranteed Asset Protection (GAP) coverage gives them a safety net if their vehicles are ever totaled or stolen and not recovered—helping cover the difference between insurance companies’ reimbursement fees and, in most cases, the actual cost of replacing the vehicle.
Many of your borrowers simply cannot afford the hundreds, or even thousands, of dollars they would need to make up the difference. So, instead, they often purchase vehicles that are of lesser value than their previous car or truck.
That’s why many lenders today offer their borrowers GAP at the time of their vehicle loan and up to one year afterward. The additional coverage gives borrowers the added assurance that they can afford to replace their vehicle quickly if it is ever declared a total loss. Giving them extra “gap” funds also helps reduce consumers’ debt stress, a condition that creates psychological anxiety for people inundated with personal debt.
However, the benefits of GAP are significantly diminished by a multitude of challenges—from weak service presentations, to not having these additional options presented to borrowers when they're considering their vehicle protection coverage options. These, and other challenges, can be corrected when the lender has the appropriate GAP service provider managing, executing, and monitoring the service offering.
GAP service delivery in today’s financial institutions is typically diminished by three key factors: lack of technology, poor product presentation, and bad customer service. All can be overcome by boosting customer service and using the right quoting and sales system.
Product Relevance/Need. Optimized delivery of GAP services to borrowers requires an easy, smooth, and clear product pitch—both for the facilitators and the borrowers.
Selection Technology. The technology you use to offer GAP should be integrated with your loan origination system. Best practices of a user-friendly GAP quoting and sales application include automated guidance throughout the process, so that providers can make appropriate product recommendations for each borrower. What’s more, the right quoting and sales system will ensure greater efficiency and fewer mistakes during the presentation.
Great Customer Service. Exceptional service delivery includes a reasonable payment timeframe for claims. An ideal turn-around time is two to five days. Making borrowers wait longer than this not only puts them in a financial bind, but it also can leave them without transportation. Borrowers should not be left waiting to get their loan cleared/satisfied with their lender. They need payment promptly, so they can purchase a replacement vehicle quickly.
The best GAP service providers in the marketplace today deliver an array of capabilities that make offering the services to borrowers efficient, effective, and satisfying. Among the vital attributes required of a GAP service provider are the following:
Align With Your Values. It’s important to remember that GAP coverage is an addendum to the financial institution’s auto loan agreement, which binds you to your GAP provider. As a result, you want a provider whose values are aligned with yours. Look for service providers who are borrower-focused and service-oriented. Remember, should a borrower have to file a claim, they’ll work with your GAP provider, as an extension of your financial institution. You want to make sure you’re working with the best.
Possess Deep Experience. Without a solid history of delivering quality GAP services, you cannot be sure that your service provider will deliver the services accurately and quickly, as well as best represent your institution. Likely, no two claims will be the same, so you’ll want to seek out a provider that has a vast amount of experience.
Provide World-Class Technology. When it comes to offering and administering GAP and other vehicle protection products, technology is the key to seamless delivery. Your loan officers need to be able to easily and quickly navigate the quoting system, generate quotes, and make the sale, all while borrowers are at their desk. If there is a disruption in the system, or a loan officer can’t give a borrower a price quote immediately, it could deter the borrower from purchasing altogether.
Provide Professional Training Services. Lastly, your GAP services provider should be equipped to offer your employees professional training services, including a balanced combination of product and sales training. A good GAP partner provides training to include a comprehensive, high-quality curriculum. Flexible training services should be delivered in a variety of facilitation methods, including onsite classroom training, interactive web sessions, community webinars, and online courses that can be accessed on demand.
Ronni Martinez joined SWBC in 1998 and is currently the Vice President of Specialty Auto Products for SWBC’s Financial Institution Group. Her background includes experience in accounting, budgeting, mortgage servicing, quality control, process improvement, and operational auditing. In her current role, Ronni oversees all of the administrative, operational, and sales support functions for SWBC’s Point-of-Sale products, including Payment Protection, Guaranteed Asset Protection (GAP), and Major Mechanical Protection (MMP).
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