When buyers sign the paperwork for a vehicle purchase, they probably breeze right past the part where they promise to maintain proper insurance. The vast majority have every intention of staying insured, and buyers simply scribble a signature and move on. Other than questioning an up-front insurance charge they weren’t expecting, they may not give the subject much thought.
However, insurance is a subject that lenders need to think about. One in eight U.S. drivers are uninsured, and some are in lenders’ portfolios. Vehicles damaged or totaled without coverage affect the bottom line of those lienholders. With auto loan debt hitting a record $1.4 trillion in 2018 and delinquency rates rising, lenders need to decide how to insure the vehicles in their portfolios. Financial considerations are crucial to making this decision, and so is the effect the choice will have on the customer experience.
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