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

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 →
New-Vehicle Financing Hits Record
Consumers are seeking ways to make financing new-vehicle purchases manageable, from extended loan terms to smaller down payments, according to Edmunds.
Read More →
Survey Reveals What Won't Fix What's Breaking Car Sales
AutoPayPlus says extra-long auto loans are trapping consumers and threatening the dealer trade-in cycle, and that the industry is leveraging the wrong tools to combat high MSRPs.
Read More →
Lease Buyouts Deemed Favorable
Better financing conditions and the potential to save money on monthly payments could drive more consumers to buy out their vehicle leases instead of opting for a new lease payment.
Read More →
Streamlining Financial Services Managers' Workflows
Managing a deal from submission to funding works best from a mix of efficient transactional methods and a customer-focused approach.
Read More →
Auto Finance Data Show Opportunities and Risks
The share of subprime, longest loan terms grow in Q4 as consumers take on more debt over longer terms to afford higher vehicle prices, Experian research finds.
Read More →
The Noisy Year That Tested the Car Deal
A StoneEagle 2025 industry report reads like a stress test. In a noisy year, F&I became the foundation that kept the house standing when the front end thinned.
Read More →
Price Driving Insurance Churn
Over half of insurance holders ages 18 to 29 reported to be 'somewhat' likely to change providers in the next 90 days, according to CivicScience, which found that interest was lower among older age groups.
Read More →
Report Finds Year-End F&I Strength
Deal volume ebbed and flowed throughout 2025, but product performance remained steady, according to automotive technology and data intelligence solutions provider StoneEagle.
Read More →
Look Ahead to the Future of F&I at Agent Summit
Joel Kansanback – CEO of Strategic Dealer Advisory – will take to the stage at the 2026 event.
Read More →