The financial services industry is continuously evolving, and it is essential to optimize collections strategies to maintain liquidity and minimize risk. One of the most critical choices for credit un...
Your borrowers expect a wide range of valuable services that are timely and relevant in today's economy.
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 the insurance company settlement and the balance of the loan. Vehicle purchases have always been huge decisions, but with the price of vehicles and interest rates on the rise, your borrowers need to protect their vehicle investment now more than ever.
That’s why many lenders offer their borrowers GAP at the time of their vehicle loan and up to one year afterward. This protection gives some additional security that they can afford to replace their vehicle quickly if it is ever declared a total loss. GAP benefits help reduce consumers’ debt stress, a condition that creates psychological anxiety for people inundated with personal debt.
When was the last time you assessed your GAP program?
As non-interest income takes on an increased focus within most financial institutions due to the current economic market, it’s vital to assess your GAP program to ensure you are offering the latest products and benefits while generating profits.
Questions to Consider When Assessing Your Program:
- Does your GAP product offer your borrower’s funds toward a replacement vehicle?
- Does your GAP program protect against depreciation after a total loss?
- Are your current pricing and revenue opportunities maximized?
- Is your training and performance support keeping up with the latest best practices?
- How is omnichannel marketing support used to promote GAP?
- Do you have self-service options to offer products throughout the lifecycle of the loan?
- How well does the quoting platform integrate with your Loan Origination System (LOS)?
Optimizing GAP Services Delivery
The success of your GAP product can be diminished by ineffective product presentation tools, outdated technology, and poor claims service. All these elements can be overcome by boosting customer service and using the right quoting and sales system.
- Product Sales Tools: Optimized delivery of GAP services requires a simple and clear presentation of the product and its benefits.
- Outdated Technology: The technology you use to offer GAP should be integrated with your LOS. Best practices of a user-friendly quoting and sales application include workflows that allow your staff to seamlessly navigate through the quoting process and make appropriate recommendations for the borrower. What's more, an integrated quoting and sales system will ensure an efficient and accurate presentation.
- Great Customer Service: Exceptional service delivery includes a reasonable payment timeframe for claims. An ideal turn-around time is 5 to 7 business days. Undue delays in turn-around time can place an additional financial burden on the borrower and leave them without transportation. Prompt payment of the GAP benefit helps to clear the loan balance with the lender so the replacement vehicle can be purchased more quickly.
The Right GAP Service Provider for the Job
The best GAP service providers in the marketplace today deliver an array of capabilities that make offering loan protection products to borrowers efficient, and effective. Your institution will want to ensure your GAP service provider:
- Aligns With Your Values: It’s important to remember that GAP is an addendum to the financial institution’s auto loan agreement. 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 partnering with an organization that understands your service level commitments.
- Possesses Deep Experience: Without a solid history of delivering quality GAP services, you cannot be sure your service provider will deliver claim 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 adjusters who are licensed, experienced, and professional.
- Provides World-Class Technology: When it comes to offering and administering GAP and other vehicle loan protection products, technology is the key to seamless delivery. Your loan officers need the ability to navigate the quoting system, generate quotes, and make the sale easily and quickly while the consumer is at their desk or on the phone. An inefficient or lengthy process could diminish the experience and may even deter the borrower from purchasing altogether.
- Provides Professional Training Services: Lastly, your GAP services provider should be equipped to offer total support that helps your institution develop and grow sales programs to ultimately increase revenue. A good GAP partner will collaborate with your team to create a customized training plan that includes a comprehensive, high-quality curriculum 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.
When you work with a partner like SWBC that goes beyond just checking off all the boxes, you’ll be able to offer top-tier benefits and services to your borrowers with confidence.
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