Tag Archive | "ADS"

A Roundup of Lease Product Providers


In talking to executives from within the industry, there is one trend that is growing – leasing. All agree that it is becoming a larger segment of automobile deals being done across the country. Many in the industry are predicting the trend will continue into 2014 (catch our January issue for a more in-depth look at this and other industry trends). This trend likely means that it is a good time for F&I departments across the country to either reexamine their lease customer offerings, or add them to their lineup.

This month, P&A went to many of the providers around the industry, and discovered an interesting fact – there just are not many options in the Excess Wear and Tear (EWT) product category. There are a few large providers that offer it, and they sell via agents, as well as private label agreements. We wanted to find out what sets each of them apart, and where they see this product category going – across the board, they are all very confident about the future of EWT products.

Technology, in particular, is one area they all agree will impact the success of lease products. The first impact is in the cars themselves – as more lease vehicles are outfitted with expensive technology, such as navigation and touch-screen infotainment systems, consumers will be responsible for paying for anything that is not in perfect working condition at lease turn-in. Many of the EWT programs now cover these items, and they all see EWT as being even more crucial for dealers and consumers alike in the future as the prevalence and cost to replace these systems only continues to increase.

The second impact of technology is in how the product itself is managed. Traditionally, many programs required consumers to pay the fees, and then submit a claim through their EWT provider to be reimbursed. Many providers are looking for ways to simplify that process, with options such as mobile apps for dealers that will allow them to verify coverage and apply it right at the time of turn-in, with no further action required by the consumer. This ease of use, they hope, will make it even more attractive across the board, and lead to greater adoption and product category growth.

EWT is not a new product category, but it is one that, in previous years, was pushed to the back of the F&I product line. With the consumer market moving again toward leasing as an attractive option, dealers, agents and providers should take another look at the category, and if it is not there already, consider adding it to their lineup for 2014. This look at the major players who offer it, and how they set themselves apart, should give every provider a great place to start.

Lease Product Roundup

Allstate Dealer Services (ADS)

Allstate Dealer Services (ADS)
Tara Webb, National Sales Director & James Dean, Director Product Operations

How did you become involved in the Lease Return/Excess Wear & Tear category?

ADS launched the Excess Wear and Tear (EWT) program in July 2011, in response to the ADS Agent Advisory Council requesting a full suite of F&I products. Since the initial launch, the product was refreshed in July 2012, to simplify the offering to the consumer (i.e., one option for coverage that has a $0 deductible, coverage for tires, missing parts and electronics).

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American Auto Guardian Inc. (AAGI)

American Auto Guardian Inc. (AAGI)
Kristen Gruber, VP, Product Development

How did you become involved in the Lease Return/Excess Wear & Tear category?

AAGI was the first TPA to introduce an Excess Wear & Tear (EWT) product back in 1997. We wanted a product designed for lease customers, and there wasn’t much to offer at the time. The product was a natural fit because most customers are familiar with the excess wear and tear provision in their lease agreement, and they understand their accountability for damages at lease end. Customer satisfaction at lease termination is key to brand loyalty and Excess Wear & Tear is a great way to improve CSI and increase retention.

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Safe-Guard Products International

Safe-Guard Products International
Dave Duncan, President

How did you become involved in the Lease Return/Excess Wear & Tear category?

We recognize that products are sold three ways: cash, lease and finance. And there are different dynamics to leasing, such as shorter terms of ownership, and consumers who are looking for gas-and-go type options. We build products to help protect customers against cost of ownership, and for leases, that includes what happens at the end of the lease and what are they responsible for. It all started with asking ourselves, “What if we build a product that can protect consumers against excess wear and tear charges?”

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Allstate Dealer Services (ADS)


Tara Webb, National Sales Director
James Dean, Director Product Operations

How did you become involved in the Lease Return/Excess Wear & Tear category?
ADS launched the Excess Wear and Tear (EWT) program in July 2011, in response to the ADS Agent Advisory Council requesting a full suite of F&I products. Since the initial launch, the product was refreshed in July 2012, to simplify the offering to the consumer (i.e., one option for coverage that has a $0 deductible, coverage for tires, missing parts and electronics). Additionally, ADS has invested in our product management team, bringing on talented individuals with over a decade of experience in EWT underwriting and risk management of OEM and TPA programs. Recognizing that the product may perform differently based on the sales channel, this team provides the oversight to ensure the products are not only tailored to the needs of the client, but that processes and reserves are adequately considered in the development and management of the program.

Our early research shows that not many providers carry this product. How have you positioned it to make it successful?
Generally, leasing companies may prefer to include their own EWT product in the capitalized cost of the lease. In this regard, the ability to offer a third party product is limited in terms of volume, and F&I providers may have chosen not to make the investment in the product offering. With respect to positioning the ADS Excess Wear & Tear product to be successful, as noted earlier, the offering was refreshed in July of 2012 with one level of coverage for the consumer. The simplified coverage included a $0 dollar deductible, combined with automatic coverage options in the core product such as tires, missing parts and electronics. This packaging helps to ensure the customer is being provided with a level of coverage they expect from an Allstate product.

What makes your product different from others on the market? How do you differentiate it?
The ADS offering is designed to be simple for the customer to understand. This includes $0 dollar deductible, and coverage for tires, missing parts and electronics. From the dealer’s view the ADS product offering can be reinsured to a dealer owned reinsurance-company, which may provide dealers with additional profit opportunities.

What is your primary sales channel? How do you market to that channel?
ADS offers the EWT product through three distribution channels 1) independent agents; 2) third party administrators; and 3) OEMs. The ADS offering is backed by Allstate, which is available to our independent agents, while our OEM and third party administrator partners can offer their own banded product that is insured by First Colonial Insurance Co.

How has technology impacted Lease Return/Excess Wear & Tear in the last year, if at all? Do you see it having an impact in the future? Why or why not?
With the increased content of electronics in vehicles today such as video equipment and navigation systems, there is risk of a failure to the equipment beyond the manufacturer’s limited warranty. The ADS Excess Wear and Tear product affords a level of coverage to respond at the time of lease turn-in for non-functioning electronic equipment that does not contribute to the mechanical processes of the vehicle. It is anticipated that the electronic content of vehicles will continue to increase whereby there is an exposure for the consumer, which in turn may create additional selling opportunities.

In your opinion, where is the greatest growth potential for the Lease Return/Excess Wear & Tear category?
With the increase in leasing as a percent of vehicle sales over the last two years, the opportunity exists for F&I providers to demonstrate to dealers the value of the product at the time of lease turn-in for the consumer. In addition, utilization of the product can make it easier for the dealer to put the customer back into a another leased vehicle at lease termination if excess wear charges are waived as a result of policy coverage.

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