The Association of Finance & Insurance Professionals - which trains and certifies F&I managers in law and ethics - plans to evaluate extended service contracts, tire and wheel coverage and other aftermarket products.
AFIP hopes to reduce risks for dealers and consumers, who have been burned when big vendors lacked the insurance needed to cover losses, says Dave Robertson, AFIP's executive director.
The association is developing standards based on the criteria auto lenders typically use to determine whether they will finance an aftermarket product, Robertson says. The most critical analysis will focus on whether plans are insured properly.
The evaluation process is still under development, but it is expected to launch in the last quarter of this year, he says. It will be funded by fees charged to lenders and vendors.
Hudson Cook, a Washington law firm that specializes in finance and insurance, will help audit the aftermarket programs. The firm represents both lenders and dealers and in the past has worked closely with the National Automobile Dealers Association on issues involving dealer finance.