Collateral Protection Insurance Buy Here Pay Here Apr 2026

CPI is a specialized insurance policy a lender (the dealership) purchases to protect their interest in a vehicle. According to Bankrate , it is triggered when a borrower fails to maintain the comprehensive and collision coverage required by their loan agreement. Why Dealers Use It

What Is Collateral Insurance and How Does It Work? - Bankrate collateral protection insurance buy here pay here

The dealer pays the premium upfront and then adds that cost—often split into monthly installments—directly to the borrower's loan payment. CPI is a specialized insurance policy a lender

It covers physical damage, theft, or total loss, ensuring the dealer doesn't lose the collateral's value if the driver is uninsured. or total loss

It saves dealerships thousands of dollars in "uninsured loan" losses. How the Costs Work