{"id":632,"date":"2019-09-10T21:04:53","date_gmt":"2019-09-10T21:04:53","guid":{"rendered":"https:\/\/verisurance.com\/?p=632"},"modified":"2024-02-19T06:40:20","modified_gmt":"2024-02-19T11:40:20","slug":"how-cpi-can-impact-auto-lendeing","status":"publish","type":"post","link":"https:\/\/verisurance.com\/es\/how-cpi-can-impact-auto-lendeing\/","title":{"rendered":"How CPI Can Positively Impact Auto Lending Margins and Reduce Risk"},"content":{"rendered":"

In today\u2019s market, auto lenders are battling to maintain profitability and growth. Finance companies, banks and other lending groups are all competing for consumer auto loans. In this economic climate, it is imperative that lenders protect their bottom line by minimizing losses.One initiative that lenders can take to help minimize losses and protect their profitability is to purchase collateral protection insurance (CPI) <\/a>to help control their risk<\/a>. This shields lenders in cases where the consumer isn\u2019t current on their insurance and is either in an accident or the vehicle is returned from the borrower with damages. In addition to controlling the risk, a sound\u00a0 collateral protection insurance (CPI)<\/a>\u00a0program will increase profitability through an entirely new profit center, as well as help to retain existing customers. It\u2019s a win-win-win for lenders.<\/p>\n

How Does CPI Benefit Lenders? <\/strong><\/p>\n

Most CPI programs are administered by a third party \u2013 the CPI administrator tracks all borrowers in the lender\u2019s auto loan portfolio to make sure that each loan has the necessary coverage in place. If the borrower has not purchased coverage for his car, or has allowed it to lapse, the administrator sends out a series of notifications informing him that he must correct the coverage issue immediately. If the borrower still does not comply, the lender has the option of placing CPI coverage on the loan and adding the premium to the loan balance.<\/p>\n

A number of auto lenders today \u201cself-insure\u201d their exposure to uninsured collateral by simply absorbing the losses. But many auto lenders have no idea exactly how much exposure they are actually carrying, because they aren\u2019t identifying and tracking those borrowers who have not maintained coverage on their vehicles and therefore can\u2019t accurately budget for it.<\/p>\n

A CPI program ends up being the most efficient way to control the risk of uninsured collateral since only those borrowers who have not maintained the required coverage on their cars end up paying for it. When deciding to implement a CPI program, it\u2019s important that lenders select an experienced company with the technological and customer service capabilities to accurately identify those borrowers who have allowed their coverage to lapse, or have policies with other deficiencies such deductibles that are too high. This is where Verisurance <\/a>comes in.<\/p>\n

How Does Verisurance Help Lenders Administer Collateral Protection Insurance?<\/strong><\/p>\n

Verisurance\u2019s \u00a0CPI solution module is designed with advanced compliance and tracking technology that lets you, as a lender, see and control your own portfolio insurance risk. Since auto insurance costs have been skyrocketing lately, lenders may be experiencing increased policy cancellations and more uninsured drivers on the road. Verifacto\u2019s CPI solution can control that risk, increase a lender\u2019s profitability and help retain customers.<\/p>\n

Why Verisurance? <\/strong><\/p>\n

Verisurance provides auto lenders with a Collateral Insurance Program that allows the lender to reduce their risk to a minimum with a cost-effective and technology based solution. Choosing Verifacto allows auto lenders to:<\/p>\n