VSC (Vehicle Service Contract)
Definition
An agreement that covers mechanical and electrical breakdowns beyond the manufacturer's warranty.
Why It Matters
VSC is typically the highest-margin F&I product and provides essential protection against costly repairs. Effective VSC presentation is the foundation of a strong F&I performance.
Examples
- A VSC can cover engine, transmission, electrical, and other major components for 5 years/100,000 miles
- Average VSC profit ranges from $1,200-$2,500 depending on coverage level and provider
Related Terms
GAP Insurance (Waiver)
Protection that covers the difference between the insurance payout and the remaining loan balance if a vehicle is totaled.
Penetration Rate
The percentage of customers who purchase a specific F&I product out of total retail units sold.
PRU (Products Per Retail Unit)
The average number of F&I products sold per vehicle, calculated by dividing total products sold by total retail units delivered. A PRU of 2.0 means you are selling an average of 2 products per car.