Ally Financial expects its used-vehicle financing portfolio to grow, but the trend toward used vehicles has extended beyond auto lenders. It’s become a focus in the F&I product world, too.
Ally’s service contract product, Ally Premier Protection, currently covers up to 175,000 miles, but it will cover 200,000 miles starting July 1, a spokeswoman said.
Ally Premier Protection offers four levels of coverage: major guard, powertrain wrap, value guard and basic guard.
The mileage extension aligns with Ally Financial’s commitment to the used-vehicle market. Andrea Riley, the company’s chief marketing officer, said last month it’s vital for Ally to support its dealers as their used inventories grow. “There aren’t a lot of lenders that will actually do used-car financing. So for us, being strong, consistent and relevant there is really important,” she said.
In a couple of years, Ally expects its retail loan portfolio to be nine to 10 times larger than its lease portfolio.
Protective Asset Protection also now offers a service program for high-mileage vehicles called Protective Auto Care Plan.
The program covers up to 200,000 miles, offers wrap plans to existing manufacturer warranties and includes rental-car reimbursement and emergency roadside assistance, Protective Asset Protection said in a statement last week.
Rick Kurtz, the company’s senior vice president of distribution, said in the statement that “with the average age of vehicles on the road remaining high and the projected growth of pre-owned inventories, we see this program serving an important role in dealerships’ F&I offering.”
Protective and Ally aren’t the only F&I product providers to offer high-mileage service contracts. EFG Cos., for example, offers its Motorist Assistance Plan, which covers an unlimited number of miles, and GWC Warranty rolled out 150,000-mile and 200,000-mile plans in June 2016.
As new-vehicle sales likely decline or plateau this year, F&I product providers are wise to position themselves for used-vehicle volume growth.