Pelican Auto Finance LLC will allow borrowers to lengthen the terms of their auto loans three to four months when they opt for a new warranty product offered through AUL Corp., Chief Executive Troy Cavallaro told Auto Finance News. Pelican is not offering longer terms as an incentive, he said, but to ensure that consumers can afford the coverage.
“To protect the consumer, we set loan terms based on the vehicle’s existing mileage,” Cavallaro said, adding that the goal is to ensure that Pelican’s customers can make their payments even if their car needs certain repairs.
Pelican partnered with finance and compliance solutions company FNI Inc. to build the warranty product, ultimately deciding on two plans. Vehicles with more than 120,000 miles get powertrain-only coverage, which includes the engine and transmission, plus other moving parts that lead to the wheels. Vehicles with fewer than 120,000 miles are eligible for a more comprehensive coverage, which includes brakes, suspension, and cooling components. The warranties cost about $1,300.
