Understanding Voluntary Protection Products

A voluntary protection product (VPP) is any product or service offered to car buyers at the time of purchase that are sold above and beyond the actual vehicle, typically as a means of protecting certain components on the vehicle. A VPP may also be offered to protect the loan a buyer is using for the purchase of the vehicle. Below are definitions of certain VPPs and some factors car buyers should consider before purchasing a VPP.

Credit Insurance
There are two common types of credit insurance. Credit life insurance is optional insurance that pays the scheduled unpaid balance if the buyer dies. Credit disability insurance (sometimes called credit accident and health insurance) is optional insurance that pays the scheduled monthly payments if the buyer becomes disabled. As with most contract terms, the cost of optional credit insurance must be disclosed in writing, and if the buyer wants it, the buyer must agree to it and sign for it.

Extended Service Contract
Optional protection on specified mechanical and electrical components of the vehicle. It is available for purchase to extend and/or supplement the warranty coverage provided when purchasing or leasing a new, or in some cases, a used vehicle.

Guaranteed Auto Protection (GAP)
Optional protection that pays the difference between the amount the buyer owes on the auto and the amount the buyer receives from his insurance company if the auto is stolen or destroyed before the buyer has satisfied the credit obligation. In some cases, the buyer may be responsible for the insurance deductible.

Tire & Wheel Protection

The purpose of Tire & Wheel protection is to repair or replace the tire or aluminum alloy wheels found today on many vehicles due to damage to the tire or wheel.

Key Fob replacement

Replacing key fobs cost anywhere from $300 to $850, depending on the make and model of the vehicle. The cost includes key replacement plus programming the key. Key Fob replacement is typically packaged with other products such as paint and dent repair (PDR) or paint and fabric protection. This could be appealing to people who do not garage their cars overnight or park outside while at work.

Lease-end protection

This is a voluntary protection product for drivers who lease vehicles. It protects the customer against excess wear & tear on the vehicle typically discovered in the lease-end inspection process when the vehicle is being turned in to the leasing company which owns the vehicle. If the leasing company has a claim on certain excess wear and tear of the vehicle, it files the claim directly with the company providing the excess wear & tear protection which takes the customer out of the claims process.