Issue No. 9 | June 2, 2026

Intelligence for F&I agents, administrators, and dealership finance professionals.

THE VEHICLE MARKET NUMBER: 69 MONTHS

The average used vehicle loan term extended from 64 months in 2018 to 69 months in 2025, according to Experian data cited in Colonnade Advisors’ March 2026 Direct-to-Consumer Vehicle Service Contract Industry Analysis. At 69 months, the vehicle enters higher-frequency repair years while the customer still has 3 to 4 years of payments remaining. Older vehicle, longer exposure, less equity. That combination reshapes which VSC and GAP products belong on the deal and how they should be positioned at the desk.

This is not a market trend observation. It is a deal structure question. The customer sitting across from you today is financing a vehicle on terms that leave them more exposed for longer than a buyer five years ago was. The product mix that worked on a 64-month book is underserving the person on 69-month paper.

THE F&I ANGLE

On a 69-month note, the customer reaches higher-frequency repair years while carrying less equity than buyers on shorter-term paper. That is a VSC conversation and a GAP conversation happening on the same deal.

A buyer at month 36 on a 69-month loan still has 33 payments ahead of them. The vehicle is in the age and mileage range where repair frequency climbs. Three years into a 69-month note, they are carrying more negative or near-zero equity than a buyer would have at the same point on a shorter loan. A total loss or a major mechanical failure at that moment is a financial event, not just an inconvenience. VSC coverage addresses the mechanical exposure. GAP addresses the equity shortfall. Both belong on a 69-month deal if the vehicle age and mileage profile support them.

Repair costs are up 13.9% since August 2022. Technician wages have risen more than 41% since 2001. The repair the buyer is betting against is more expensive than it was when your F&I process was designed. The coverage levels and terms you are presenting should reflect the cost environment they are actually buying into, not the one from five years ago.

FROM THE BLOG

The DTC VSC Market in 2026: Why the Fastest-Growing F&I Channel Is Just Getting Started

Colonnade’s March 2026 Direct-to-Consumer Vehicle Service Contract Industry Analysis identifies five structural demand drivers for vehicle protection products: loan term extension, repair cost inflation, an aging vehicle fleet, constrained affordability, and dealer remarketing growth. The post examines how those trends are shaping the ownership environment the F&I desk is selling into today and why the DTC channel is growing at 12.3% CAGR.

THE DESK STAT

At month 42 on a 69-month note, the borrower has 27 payments remaining and is driving a vehicle entering higher-frequency repair years, with less equity than a buyer at the same point on a shorter loan. What percentage of the deals your F&I desk is closing right now are on 65-month or longer terms, and are you presenting VSC and GAP together on those deals?

Until next Tuesday —

Reply here and tell me what your average loan term looks like on used vehicle deals right now. If it is above 66 months, there is a product mix and presentation conversation worth having. We can compare how longer-term paper is changing VSC and GAP positioning across dealership portfolios.