Debt Cancellation Addendums

A Voluntary Debt Cancellation Coverage Addendum is an alternative to Comprehensive and Collision Insurance that the dealership or the finance company can offer to the customer, (Subject to your state regulations).
Debt cancellation can lower your customer’s costs to own a vehicle. When a customer chooses debt cancellation as an alternative to comprehensive and collision insurance, only liability insurance is required. Debt cancellation is normally less expensive than comprehensive and collision insurance.
In the event of a covered total loss to the collateral, the customer’s payments due are cancelled, minus a small deductible, or no deductible, depending on your state regulations. The dealership or finance company is reimbursed for the collateral’s current, actual cash value by the reinsurance company.
Is debt cancellation, “Insurance”? No, it is an agreement which amends the retail installment contract.
Debt cancellation is different from insurance, debt cancellation reimburses the finance company on total losses and the customers debt is waived. Debt cancellation does not pay for partial loss repairs, and is less expensive for your customer to obtain than property damage insurance.
Debt Cancellation charges can be added to the retail installment contract as a line item, becoming part of the customer’s payment.
When your customers have debt cancellation coverage, there is no insurance tracking.
The claims process is quick and easy, since no outside insurance company is involved.
The customers who choose debt cancellation will have larger down payments. The amount of money needed to obtain insurance is considerably less, when only liability insurance is required.
Reinsurance allows you to earn the underwriting profits.
Debt Cancellation is a win, win, for you and the customer
This is an overview of debt cancellation addendums. Please contact AVP for the debt cancellation addendum full details and the debt cancellation contract applicable to your state.
All, AVP Programs are reinsurance programs, where you earn the underwriting profits.