Skyrocketing Used Car Prices Drive Record Sales of Vehicle Protection Policies
Growing numbers of car buyers looking to insure their investment against problems down the road.

Growing numbers of car buyers looking to insure their investment against problems down the road.
With new car sales being constrained by the global computer chip shortage, used car sales and pricing are skyrocketing, according to J.D. Power and the U.S. Labor Department. As a result, AUL Corp, which is one of the nation’s leading automotive warranty and service contract providers, recently reported record sales in the first half of 2021, a 44% increase over 2020. “This increase in sales is due in large part to people wanting to protect what has changed from a depreciating asset to what is now an appreciating one, combined with the increasing complexity of today’s technology focused vehicles,” explained Jimmy Atkinson, AUL’s President and CEO. “The resulting high prices for used cars and trucks are driving more owners and buyers to purchase coverage plans to ensure their vehicles stay on the road longer.”
Driven by a perfect storm of unique market conditions; worldwide microchip shortage, rental car fleet depletion, pandemic reopening and more, used car prices have reached an all-time high. According to J.D. Power, the average used car price surpassed $25,000 for the first time in April 2021. And in the case of very popular makes and models, the sticker prices are higher even than when the vehicles were new. And similar to what they do with other large investments, growing numbers of consumers are looking to protect their vehicles with policies that limit large repair bills down the road.
Another financial incentive for consumers to consider a vehicle warranty or service contract is the rising cost to repair the increasingly complex technology systems found in even the base models of vehicles. From lane assist to automatic braking, rearview cameras to navigation, Apple Car Play and Android Auto, these systems are driving the cost of repairs ever higher.
“Due to the pandemic, dealers were forced to handle most vehicle sales transactions entirely online and in doing so, introduced buyers to vehicle service contract options earlier in the sales process. This extra time has worked to the benefit of buyers, allowing them to do their research and make informed decisions about which policies were the best fit for them ahead of time,” stated Atkinson.
These factors and more have combined to create record demand for peace of mind on the road via warranty and service contract policies. As a full-service finance and insurance product provider, AUL Corp sells a full suite of automotive protection policies though a national network of dealers, agents, and financial institutions and is in a position to see changes in sales velocity first-hand. AUL’s policies include vehicle service contracts (VSCs), extended warranties, technology systems coverage, GAP coverage, theft protection, tire and wheel protection, key replacement, roadside assistance, scratch repair, pre-paid maintenance packages, and more.
Originally posted on Auto Dealer Today
More F&I

Integrating Nontraditional F&I Products
The niche presents a strategic advantage for auto dealerships as they move to adapt to fast-changing consumer expectations in today’s market.
Read More →
Trust Is Personal
Technology, no matter how efficient, can’t replace what the human F&I manager can do, which is to bridge the divide between cyberspace and the in-store experience.
Read More →
Amplify 2026 Billed as Turning Innovation Into Results
Reynolds and Reynolds says its annual retail summit will connect dealers with practical strategies, peer insight, and technology-driven ideas.
Read More →
Own Your Outcome: F&I in the Digital Customer Journey
Finance has historically been the last step in the car-buying process, but it doesn’t have to be. The customer’s journey starts long before they arrive at the dealership, and so should F&I’s involvement.
Read More →
Tariffs Could Raise Insurance Premiums
As U.S. import tariffs affect repair costs, consumers might find it more affordable to replace a damaged vehicle, according to recent Insurify tariff analysis.
Read More →
Smaller Loans, Longer Terms
The youngest generation of car buyers is more likely to finance less expensive vehicles, more than half of generation Z consumers borrowing less than $25,000.
Read More →
New Lifetime Battery F&I Product Meant to Drive Dealer Traffic
EFG Cos. offering is intended to create lifetime auto dealer engagement with customers.
Read More →
The Psychology Behind Menus That Increase Add-On Sales
There is a science to crafting a menu that gives customers confidence in the choices presented, and moving the process outside the F&I office can further boost results.
Read More →
Why Your F&I PVR Is Misleading You
Here’s a handy checklist of the numbers to track in 2026 instead.
Read More →
Auto Consumer Anxiety Presents Opportunity
A survey of U.S. drivers found the majority are concerned about finances and the economy, but those fears make many ready to buy vehicle-protection products.
Read More →