Reference
F&I Product Glossary
The terms behind the products and the finance office, defined in plain English. Search, filter by category, or jump by letter. The set grows as the library expands.
45 terms
Administrator (TPA) Administration & claims
The third party that runs an F&I product’s enrollment, service, and claims. Distinct from the obligor and the insurer.
Back-End (F&I) Gross Coverage & terms
The gross profit from finance and F&I products, as opposed to front-end vehicle gross. The output of the finance office.
Battery Degradation Coverage & terms
The gradual capacity loss of an EV battery over time — usually handled, if at all, by a factory capacity guarantee rather than a service contract.
Cancellation & Refund Coverage & terms
Most F&I products can be cancelled for a prorated refund of the unused portion, subject to the terms and any fee. Refunds often apply to the loan balance.
Ceramic Coating Products
A liquid polymer applied to a vehicle’s paint to resist contaminants and ease cleaning. Quality and warranty terms vary widely between dealership and professional applications.
Chargeback Coverage & terms
When a customer cancels a product (or pays off/defaults early), the unearned portion of the commission is reclaimed from the dealership. Chargebacks reduce the net contribution a product actually earns.
Claims Adjudication Administration & claims
The process of evaluating a submitted claim against the contract’s terms to decide what, if anything, is payable.
Claims-Approval Rate Administration & claims
The share of submitted claims an administrator approves — a signal of claims experience, read alongside fairness and turnaround.
Close Rate Finance office metrics
The rate at which presented products are accepted. Read alongside compliance and customer trust, not in isolation.
Commercial Use Coverage & terms
Using a vehicle for business purposes — a condition many consumer service contracts exclude, requiring coverage written for commercial use.
Customer Acknowledgement Compliance
A customer’s documented confirmation that products, prices, and terms were presented and understood — for example, a signed menu showing what was offered and what was chosen.
Customer Privacy Compliance
Handling and safeguarding a customer’s personal and financial information responsibly and only for permitted purposes. Specific obligations vary by jurisdiction; consult qualified professionals.
Deductible Coverage & terms
The amount the contract holder pays per claim or visit before the product pays the rest, as defined by the contract.
Dent Protection Products
Coverage for minor dents and dings, typically repaired via paintless dent repair, subject to size and location limits in the contract.
Depreciation Coverage & terms
The decline in a vehicle’s value over time — the erosion that equity-protection products aim to offset.
Disclosure Compliance
Clearly and accurately presenting the terms, prices, and features of financing and F&I products to the customer, in line with applicable requirements. What is required varies by jurisdiction and over time. Not legal advice.
Documentation Compliance
The complete, accurate, and consistent paperwork that records a transaction and the customer’s choices. Good documentation supports a compliant, defensible, and repeatable process.
Equity / Depreciation Protection Products
Products (marketed under names like PowerBuy) aimed at preserving or restoring vehicle value toward a future purchase — a different problem than GAP solves.
EV Battery Coverage Products
Protection addressing the high-voltage battery and drive components of an electric vehicle — the most expensive parts to replace out of warranty.
Exclusionary Coverage Coverage & terms
A service-contract model that lists only what is NOT covered — everything else is included. Generally the broadest coverage form.
F&I Compliance Compliance
The body of consumer-protection rules governing how the finance office discloses terms, presents products, and treats customers.
F&I Manager Finance office metrics
The person who presents finance and protection products, manages compliance, and closes the paperwork on a deal.
GAP (Guaranteed Asset Protection) Products
Waives the difference between a total-loss insurance settlement and the remaining loan or lease balance, so the borrower isn’t left owing on a car they no longer have.
Insurer (Backing) Administration & claims
The insurance company that backs the obligor’s promise, providing the financial security behind the product.
Key Replacement Coverage Products
Reimburses the cost of replacing lost, stolen, or damaged keys and remotes — meaningful because modern keys must be cut and electronically programmed.
Loan-to-Value (LTV) Coverage & terms
The loan amount relative to the vehicle’s value. High LTV increases the chance of negative equity and the relevance of GAP.
Loss Ratio Administration & claims
Claims paid as a share of premium earned — a measure of how a product performs. Deeper reserve/participation topics live on dealer-reinsurance.com.
Negative Equity Coverage & terms
When a borrower owes more on a vehicle than it is worth — the condition that makes GAP relevant.
Net Product Contribution Finance office metrics
What a product actually earns after product cost, cancellations, chargebacks, and direct administrative expense — as opposed to the headline retail gross shown at the point of sale.
Obligor Administration & claims
The party legally responsible for providing a product’s benefits. May be the dealer, administrator, or a separate entity depending on structure.
Penetration Finance office metrics
The percentage of deals on which a given product is sold. A 45% VSC penetration means VSCs were sold on 45% of deals.
PowerBuy Products
A brand of equity/depreciation protection designed to cushion value loss and support a future vehicle purchase, distinct from GAP’s total-loss coverage.
Products Per Deal (PPD) Finance office metrics
The average number of F&I products sold on each deal — a measure of menu effectiveness and product fit.
PVR (Per-Vehicle Retailed) Finance office metrics
Average F&I gross profit earned per vehicle sold — a core finance-office performance metric.
Record Retention Compliance
Keeping transaction and compliance records for the appropriate period and in a way they can be found and produced. Retention periods vary by requirement and policy.
Road Hazard / Tire & Wheel Products
Coverage that repairs or replaces tires and wheels damaged by road hazards such as potholes, nails, and debris — damage ordinary warranties and insurance often exclude.
Stated-Component Coverage Coverage & terms
A service-contract model that lists exactly which components ARE covered — anything not named is excluded. Narrower than exclusionary coverage.
Third-Party Administrator (TPA) Administration & claims
Another name for the administrator — the company handling the operational side of a product on behalf of the obligor.
Total Loss Coverage & terms
When a vehicle is damaged or stolen beyond economical repair and the insurer settles for its value rather than repairing it — the event GAP responds to.
TPMS Coverage & terms
Tire Pressure Monitoring System — sensors many tire & wheel contracts address when a covered tire or wheel is replaced.
Truth in Lending (disclosure) Compliance
The principle that credit terms must be disclosed clearly and accurately to the borrower — foundational to compliant finance-office practice. Not legal advice.
Upfit Coverage & terms
Aftermarket equipment or modifications added to a work vehicle, frequently excluded from coverage unless specifically added.
Vehicle Service Contract (VSC) Products
A contract that pays to repair or replace covered components after the manufacturer’s warranty. Often called an “extended warranty,” but it is a service contract, not insurance.
Windshield Protection Products
Coverage for repair or replacement of a damaged windshield, which can overlap with auto insurance — worth comparing before doubling up.