The landscape for Vehicle Value Protection Agreements (VVPAs) in the United States is rapidly maturing, with a growing number of states enacting statutes that explicitly authorize the sale of these innovative financial protection products.

What Are Vehicle Value Protection Agreements
Vehicle Value Protection Agreements (VVPAs) are contractual agreements commonly offered as add-on products by dealerships at the point of sale. Unlike traditional warranties or GAP waivers, VVPAs provide vehicle purchasers with a benefit upon specific adverse events such as total loss, theft, damage, depreciation, or diminished value.

Types of VVPAs Include:

• Total Loss Protection: Offers a financial benefit if the covered vehicle is declared a total loss.

• Trade-in Credit: Offers credits toward a new purchase or lease upon trade-in of the covered vehicle.

• Depreciation Protection: Address losses related to a vehicle’s depreciation throughout its ownership.

• Down Payment Protection: Offers a financial benefit toward a down payment on a replacement vehicle.

• Diminished Value: Protect against loss of value after an accident or other damaging event.

Key Distinction from GAP Insurance
While GAP waivers cancel a portion of the loan balance upon a total loss, VVPAs provide direct value or credit for various adverse events, not just total loss, typically as a credit toward a replacement vehicle or increased trade-in value.

Explicitly Authorized States for VVPA Sales
As of July 2025, the following states have explicitly authorized the sale of VVPAs via statute or regulation, and more are in the process:

In these states, VVPAs are generally regulated as a distinct product category, with consumer protections including registration, reimbursement insurance requirements, disclosures, and cancellation rights.

Benefits and Considerations for Vehicle Owners

VVPAs offer:
• Financial protection against unforeseen value loss
• Peace of mind in the event of major accidents, theft, or depreciation
• The potential to maintain or improve trade-in value

Considerations:
• Regulatory requirements and coverage vary by state
• Review all agreement terms for eligibility, exclusions, benefits, and cancellation rights
• Evaluate alternatives such as extended warranties or GAP insurance

Well-designed and implemented Vehicle Value Protection Agreements (VVPAs) can unlock new products and solutions for the automotive industry. Find out how Meramec Secure^® can support your business objectives.

About Meramec Secure®
Meramec Secure^® is a nationwide designer and producer of specialty insurance and service contract solutions, assisting companies in sourcing or building new specialty insurance, service contract, and warranty products and programs. With extensive relationships with subject matter experts and multiple insurance carriers, Meramec Secure provides custom solutions that eliminate frictional costs and ensure compliance, licensing, and other critical elements.

For more information, please contact:
Mike Frosch, President
Meramec Secure, Inc.
Web: meramecsecure.com
Email: mike@meramecsecure.com