Vehicle Service Contracts and Aftermarket Products Flashcards
7 cards from real AFIP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Vehicle Service Contracts and Aftermarket Products flashcards as text
What is the primary purpose of GAP (Guaranteed Asset Protection) coverage in automotive F&I?
Answer: To cover the difference between the vehicle's ACV and the outstanding loan balance if the vehicle is totaled
GAP coverage pays the difference between the insurance company's actual cash value (ACV) settlement and the remaining loan or lease balance when a vehicle is declared a total loss.
Which of the following scenarios would GAP coverage most directly address?
Answer: A customer's vehicle is stolen and their primary insurance pays less than the loan balance
GAP coverage is specifically designed to cover the financial shortfall when a total loss settlement from primary insurance is less than the outstanding loan balance, as commonly occurs with theft.
Credit life insurance offered through an F&I department is primarily designed to:
Answer: Pay off the outstanding loan balance if the primary borrower dies
Credit life insurance is a decreasing term policy that pays off the vehicle loan balance upon the death of the insured borrower, protecting co-signers and the estate from the remaining debt.
What distinguishes Credit Disability Insurance from Credit Life Insurance in F&I?
Answer: Credit disability makes loan payments if the borrower becomes disabled; credit life pays off the balance upon death
Credit disability insurance makes the customer's monthly loan payments during a qualifying disability period, while credit life insurance pays off the entire loan balance at death — they address different risk events.
A Tire and Wheel Protection plan in automotive F&I typically covers:
Answer: Damage to tires and wheels caused by road hazards such as potholes and nails
Tire and wheel protection plans cover road hazard damage — such as blowouts from potholes, cuts from nails, or cracked alloy wheels — which are not covered by the vehicle's standard warranty.
Paintless Dent Repair (PDR) coverage as an aftermarket F&I product is best described as:
Answer: A service contract covering minor dents and dings without repainting
PDR coverage pays for technicians to massage out minor dents and door dings using specialized tools without disturbing the factory paint finish, addressing common parking lot damage.
When presenting aftermarket F&I products, AFIP standards require that pricing be disclosed in which manner?
Answer: The total price of each product must be disclosed separately and clearly
AFIP ethical standards and consumer protection regulations require that the total cost of each individual aftermarket product be clearly and separately disclosed so customers can make informed purchasing decisions.