Data Shows Various Impacts and Complexity of Vehicle Repairs on Claims

Protective Asset Protection, a provider of F&I programs, services and dealer owned warranty company programs, announced today, a new set of data analysis showing how much average claims have increased annually for GAP payouts and Vehicle Service Contract (VSC) claims dating back to 2014.

The average GAP claim payout has risen 19.5% between 2014 and 2018 for new vehicles, and a 95% increase over the same time for used vehicles. New vehicles have averaged a 4.7% increase each year during that time, and 18.5% per year increase for used vehicles.

Protective Asset Protection points toward several factors that have led to this increase in GAP claims payouts over the last few years: An increase in claims due to more accidents with more cars on the road; Insurance companies are more likely to total vehicles due to rising replacement parts complexity and corresponding costs, in conjunction falling residual values (particularly for cars over SUVs/crossovers and trucks); and more impactful weather events driving up claims payouts in recent years.

Average VSC claims have risen 21% between 2014 and 2018 for new vehicles, and a 3.7% increase for used vehicles. New vehicles have averaged a 5% increase each year during that time, with a smaller 0.9% increase for used vehicles.

“Service contract claims had among their largest payout increases in 2018 for both new and used vehicles, which illustrates that the costs associated with repairs and parts replacements continues to rise due to the complexity of today’s vehicles,” said senior vice president, operations and information technology, Christopher Bernish. “GAP claims are impacted by many of the same factors but also tend to be influenced by weather patterns, which is understandable, given recent devastating hurricanes and other weather events.”

While many analysts continue to predict softening new car sales, used vehicle demand is expected to continue to increase throughout the year. Edmunds analysts expect 2019 used vehicle sales to reach 41 million, their highest level since the recession. These trends will certainly impact F&I product claims activity going forward.

Dealers continue to focus on F&I programs to combat margin compression and improve ownership satisfaction. Ownership groups have also looked to have greater transparency with their F&I programs such as leveraging dealer-owned warranty company structures, whereby dealers own, market, sell and support their own branded F&I program. Besides greater profit potential on F&I sales, the great benefit here lies in the fact that dealers offer their own F&I offerings ranging from service contracts to ancillary products.



Protective Asset Protection provides vehicle protection plans, GAP, and credit insurance through vehicle dealerships. Protective Asset Protection has been serving dealers for more than 55 years and currently provides products and services to automobile, marine, RV and powersports dealers. Protective Asset Protection is part of the financial services holding company, Protective Life Corporation. For more information about Protective Asset Protection call 800-323-5771, or visit



Protective Life Corporation provides financial services through the production, distribution and administration of insurance and investment products throughout the U.S. Protective traces its roots to its flagship company, Protective Life Insurance Company – founded in 1907. Throughout its more than 110-year history, Protective’s growth and success can be largely attributed to its ongoing commitment to serving people and doing the right thing – for its employees, distributors, and most importantly, its customers. Protective’s home office is located in Birmingham, Alabama, and its 3,000+ employees are located in offices across the United States. As of March 31, 2019, Protective had assets of approximately $92 billion. Protective Life Corporation is a wholly owned subsidiary of Dai-ichi Life Holdings, Inc. (TSE:8750). For more information about Protective, please visit

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