GAP Refunds Cause a Bump in the Road: Latest Research Shows Opportunity to Build Trust for Auto Finance Providers

Drivers are demanding more transparency and communication from their dealerships, lenders, and F&I contacts, and regulators like the Consumer Financial Protection Bureau (CFPB) are scrutinizing the industry more than ever before. Data shows drivers want clarity about their financial products like F&I ancillary products, specifically GAP insurance refunds.

Onbe’s 2024 Auto Finance Payment Survey found that 62% of drivers felt unsure whether they were owed a refund at the end of their financing term, and that sentiment is validated by the over a thousand searches the query “how to get a gap insurance refund” received in just the last month (SEM Rush). We know that the actual repayment process is critical in re-establishing credibility with drivers, as the final touchpoint at the close of a financing term and can make or break a consumer’s impression of a provider. Creating a clear, quick, and understandable process is critical, yet 56% of GAP refunds are still paid by check, which can take weeks for a consumer to receive the funds after time in the mail and the business days required for the check to clear.

An opportunity quickly emerges for providers to build trust among drivers and get compliant amid more regulatory scrutiny: digitizing the refund experience. According to Onbe research, 67% of drivers feel digital solutions would positively impact their trust in their auto financing provider, and 88% think digital payment would be more convenient than a check in the mail. With 47% drivers taking 1-3 days to deposit a check, the delay and inconveniences only increase with delay time to deposit and access funds.

The lack of clear communication and direction can lead to atrophied trust and often results in increased customer service queries and complaints. When 73% of survey respondents say digital refunds are clear and easier to understand compared to check-based refunds, it’s apparent that transitioning to digital and choice-oriented payouts can relieve many of the pressures providers are facing from compliance scrutiny to consumer trust, all the way to minimizing service and support labor costs.

To learn more about how a modern refund experience can bolster trust among drivers, contact a payments expert at onbe.com.