Depreciation is inevitable. Lost value doesn’t have to be.

Every auto lender understands depreciation. It is predictable, unavoidable and largely ignored once the loan is booked.

That’s the problem.

Even in a moderate market, depreciation is the largest cost of vehicle ownership. Vehicles lose thousands of dollars in value every year, regardless of how responsible the borrower is. And for customers who put money down, build equity early and stay ahead on their loan, a total loss not only takes away their transportation. It wipes out an investment.

For lenders, that moment is a test. It can either break trust or reinforce it.

A shift in borrower mindset

Many of today’s borrowers are disciplined. They are putting money down, paying loans faster and holding onto vehicles longer. They aren’t worried about being upside down on their loan; they are worried about protecting what they have already put in.

At the same time, the market is tightening. Affordability remains front and center. Vehicle sales are expected to soften as price sensitivity continues to shape buying behavior.

All of this creates a gap.

Most protection products are built to solve financial distress. Fewer are designed to protect financial progress.

Depreciation protection waivers change the equation

A depreciation protection waiver (DPW) fills that gap.

If a vehicle is totaled or stolen and not recovered at any point during the life of the loan, a DPW waives some or all of the remaining loan balance based on the difference between the vehicle’s value at purchase and the outstanding loan balance at the time of loss.

But the impact is bigger than the math. A DPW is designed to protect the equity borrowers have in their vehicle, not just the loan itself. It shifts the outcome of a total loss from starting over to moving forward.

DPW versus GAP: A simple way to think about it

Guaranteed asset protection (GAP) and a DPW are often grouped together, but they solve very different problems.

GAP protects borrowers who owe more than the vehicle is worth.

A DPW protects borrowers whose vehicle is worth more than they owe.

Another way to think about it: GAP helps when a borrower falls behind the vehicle’s value. A DPW protects the borrower who gets ahead of the vehicle's value.

In a total loss, a DPW can pay down or pay off the remaining loan, so the waiver benefit goes back to the borrower. That’s a meaningful difference. Instead of losing both the vehicle and the equity, the borrower keeps the value they created.

It's not just a product distinction; it’s a mindset shift.

Why it matters

For financial institution leaders, a DPW delivers strategic advantages:

• It supports financially responsible customers, not just those in distress.
• It strengthens trust at the most critical moment in the lending relationship. When a loss happens, the outcome feels fair. That matters.
• It creates a differentiated experience in a market where products and rates alone are no longer enough to stand out.
• It supports balanced portfolio performance by pairing borrower value with responsible fee income.

This isn’t about selling more add‑ons; it’s about closing a gap in how lenders protect their customers.

The bottom line

Depreciation is unavoidable. Losing the value built along the way doesn’t have to be.

The institutions that win in the next phase of auto lending will be the ones that recognize a simple truth: Protecting borrower value is not a nice‑to‑have; it’s a loyalty strategy.

DPWs make that strategy real.

Why institutions partner with Securian Financial

Securian takes a long view of loan protection. We help financial institutions move beyond traditional coverage by delivering solutions that preserve borrower value, strengthen portfolio performance and provide a simpler and more transparent experience across the life of the loan.

Our DPW offerings are designed to be easy to implement and easy for borrowers to understand, with built-in benefits that reinforce value at every stage.

In a market where every dollar matters, clarity and simplicity aren’t operational details, they are competitive advantages.