Point of Sale Collateral Insurance
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| Auto Insurance for Subprime Loans |
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THE NEED
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Lenders require the customer to provide insurance to protect their interest in the financed vehicle
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Up to 75% of non-prime customers entering a dealership do not have insurance coverage
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The customer buys short term coverage (a binder) to get the loan closed, and the coverage cancels shortly thereafter for non-payment of premium
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The lender ends up with an uninsured loan with the potential for physical damage losses and charge-off
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THE SOLUTION - Point of Sale Collateral Insurance
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The dealer/lender utilizes a web-based system to help the customer meet the physical damage insurance requirements of the loan.
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Provides insurance protection for the lender to reduce insurance-related losses and charge-offs
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Reduces repossessions - the coverage repairs vehicles, keeps the customer paying the loan payment
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Increases the profit of the loan
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Greatly reduces the need for insurance tracking
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Term of insurance coverage is tailored to fit the lender’s needs
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Increases interest income for the lender
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Eliminates delays in funding for insurance verification
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Lower out-of-pocket expense for the customer so there is more down payment and/or dealer profit available
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Convenient payment process for the customer - the insurance is financed as part of the loan
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Liability insurance available for states requiring coverage
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LENDER BENEFITS
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Immediate protection for Loan/Vehicle at loan origination
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Borrower cannot cancel coverage unless he provides evidence of acceptable other insurance
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Coverage is paid by the borrower as part of the loan payment
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Cash Flow Benefit - premium is financed as part of the loan, yet the lender pays for the coverage monthly to insurer, therefore increasing the loan yield
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Increased interest income from financed insurance costs
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No expenses or hassles like traditional track and place collateral insurance programs
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Insurance coverage term determined by the lender, not the borrower
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Happy Dealers - solution for insurance protection that is quick, easy and speeds up funding
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Enhances the credit quality of the loan
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Insurance designed to meet the coverage needs of the lender and borrower
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Underwritten by an "A" Excellent A.M. Best rated insurance company
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| DEALER BENEFITS |
CUSTOMER BENEFITS |
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No delays in funding - no waiting for insurance verification
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Fast - takes only 3 to 5 minutes to complete entire transaction
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Easy - Web-based rating and issuance of documents
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Simple - no faxing of documents needed, coverage is secured electronically
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Timely - coverage can be obtained late evenings and weekends; no asking the customer to return later
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Convenient - coverage confirmation documents print for the customer and for the funding package at the dealer’s desktop
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No Hassle - no insurance license required at the dealership
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Easy and quick - completed at the dealership in just a few minutes
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Customer is approved - no driving record check
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Convenient - insurance is paid as part of the regular loan payment
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Immediate coverage - drive off the lot with active insurance coverage
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Borrower coverage - claims can be filed by borrower, without repossession
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No cash needed - no premium down payment needed
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