Issue No. 3 | April 21, 2026

Intelligence for direct marketers in insurance, home services, warranty, and protection.

This Week: The Affordability Handoff

THE NUMBER: 27%

A record 27% of underwater trade-ins now carry $10,000 or more in negative equity, per Edmunds Q4 2025. That is an all-time high. The average underwater balance sits at $7,214, also a record, and 29.3% of all new-vehicle trade-ins are now underwater. The severely upside-down borrower that Joel Kansanback flagged in his 2026 Agent Summit keynote is no longer an outlier. It is a measurable cohort.

At the same time, 29.6% of new-vehicle loans in Q4 2025 extended to 73–84 months, and used-vehicle interest rates are running above 11% (NADA Data 2025). The used-car buyer is now carrying more debt for longer at a higher cost, changing how repair risk is absorbed. The repair they cannot fund out of pocket is the problem your product solves.

THE OPERATIONAL ANGLE

This is a targeting shift, not a messaging change. The traditional DTC VSC acquisition model leans on new-vehicle triggers, targeting vehicles recently sold and approaching factory warranty expiration. That cohort is tightening as affordability pushes the average new-vehicle price to $48,205 and the Q4 monthly payment to $767. Fewer buyers clear that threshold, and more are holding their vehicles longer or trading into used.

Two audience segments are worth building against now. The used-vehicle buyer with a fresh loan is operating at an interest rate above 11%, which leaves little room in the monthly budget. A repair bill lands on a household that cannot absorb it, and this segment converts on budget certainty rather than peace of mind. The extended-hold owner is driving a vehicle aged four to eight years outside factory warranty and held by choice rather than refinance. This group experiences repair costs directly and is positioned to buy coverage without a trigger event.

Both segments sit under the same affordability pressure and respond to creative that frames protection as a budget tool rather than an emotional hedge.

FROM THE BLOG

The Agency of the Future: F&I’s Next Five Years Are Twenty-Five Years of Change

Joel Kansanback’s 2026 Agent Summit keynote argues that the next five years in F&I will compress decades of change. This week’s post connects that shift to the current operating environment, including affordability pressure, rising regulatory scrutiny, and the growing role of technology in how F&I is executed.

QUICK HIT

A 73–84 month loan term keeps a borrower in debt while the asset depreciates. That is the household most likely to convert on a mid-term protection offer, and one most DTC models are not actively targeting.

Until next Tuesday —

If this is changing how you’re thinking about list strategy or creative for Q2, contact us. Happy to think through it.