Consumers buying expensive vehicles and those with plans for lengthy ownership or whose finances make them unable to afford more than a $500 sudden expense are among the most likely groups to purchase a vehicle service contract, new research has found.
High-mileage vehicles or driving habits also can boost the odds a consumer buys a finance and insurance product, according to a June paper by retired Federal Reserve Senior Economist Thomas Durkin, Federal Reserve Principal Economist Gregory Elliehausen and Mississippi State University Professor Thomas Miller Jr. Their work was funded by the Voluntary Protection Products Coalition and drew upon polling in January and March of 1,200 consumers.
The Federal Trade Commission last year argued consumers are being hoodwinked into buying various F&I products and proposed auto retail regulations to improve transparency and curtail dealership deception.