For financial institutions and auto lenders, reducing losses and improving loan servicing efficiency are essential to maintaining strong portfolio performance. Two solutions consistently stand out as top tools for reducing risk and improving recovery outcomes: Blanket VSI (Vendor’s Single Interest) Insurance and a comprehensive Repossession and Remarketing program.
Individually, each program provides valuable protection. But when integrated, Blanket VSI coverage and repossession/remarketing workflows create a powerful, end-to-end loss-mitigation strategy that enhances operational efficiency, improves borrower experience, and ultimately strengthens a lender’s bottom line.
This guide explains how Blanket VSI and repossession programs work together—and why pairing them can significantly improve collections, charge-off performance, and overall risk management.
What Is Vendor’s Single Interest (VSI) Insurance?
Vendor’s Single Interest insurance—often referred to as Blanket VSI—provides portfolio-level protection for auto lenders in cases where borrowers fail to maintain insurance or when collateral becomes damaged, stolen, or unrecoverable.
Common Blanket VSI coverage features include:
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- Physical damage protection for uninsured or underinsured losses
- Skip and conversion coverage
- Repossession expense reimbursement
- Mechanics lien or storage fee coverage
- Limited deficiency or collateral value protection
Blanket VSI is not borrower insurance. It is designed solely to protect the lender, reduce uninsured exposure, and eliminate the administrative burden of tracking individual borrower insurance post-closing.
What Repossession & Remarketing Programs Do for Lenders
A strong repossession and remarketing program may help lenders efficiently recover and liquidate collateral tied to delinquent accounts.
Effective programs typically provide:
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- Real-time assignment and vendor management
- Skip tracing and location services
- Repossession coordination and compliance tracking
- Condition reporting and valuation insight
- Transport, storage, and secure handling of assets
- Reconditioning recommendations
- Multi-channel remarketing (auction, online, dealer networks)
- Detailed analytics and performance reporting
The goal is simple: accelerate time-to-recovery, minimize losses, and maximize liquidation values.
Blanket VSI & Repossession: Strengthening Loan Loss Mitigation
Integrating Blanket VSI with a repossession and remarketing program gives financial institutions a proactive, end-to-end solution for collateral protection, loan recovery, and portfolio performance improvement.
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Lower Charge-Offs Through Complementary Protection
Blanket VSI provides lenders with coverage for events such as damage, theft, skip, and conversion. Coupled with a strategic repossession and remarketing program, lenders can maximize the value of recovered collateral.
Together, they help reduce:
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- Loan deficiencies
- Charge-offs
- Net loss per account
- Unsecured exposure
This combined approach enhances portfolio stability and profitability.
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Streamlined Workflows and Reduced Administrative Burden
Managing multiple vendors, claims, and auctions can slow down loan servicing teams. Integrating Blanket VSI with repossession services creates:
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- Centralized communication and reporting
- Predictable, consistent workflows
- Faster claim-to-sale transitions
- Reduced manual follow-up for insurance
- Lower operational workload for collections and servicing teams
This leads to more efficient loan servicing and faster delinquency resolution.
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Improved Borrower Experience During Delinquency
Even during repossession or claims, borrower experience matters. Coordinated Blanket VSI and recovery workflows can result in:
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- Fewer unnecessary fees for borrowers
- Reduced confusion from force-placed insurance, also known as CPI (Collateral Protection Insurance)
- Faster resolution for totaled or stolen vehicles
- Minimal vendor touchpoints during stressful situations
A smoother process reduces friction and potential complaints, improving overall level of borrower satisfaction.
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Higher Net Collateral Returns Through Smarter Remarketing
Repossession teams that follow Blanket VSI claim guidelines can make informed decisions on:
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- Repair vs. as-is sale
- Auction channel selection
- Transport and timing strategies
- Floor pricing and reconditioning investments
This ensures lenders receive maximum sale proceeds or timely Blanket VSI payouts when recovery value is insufficient, improving overall loan recovery performance.
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Stronger Compliance, Documentation, and Vendor Oversight
Integrated programs help lenders maintain compliance with:
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- Federal and state repossession laws (CFPB, FDCPA)
- Default and collateral protection procedures
- Vendor management and reporting requirements
Documented workflows and real-time reporting ensure audit readiness, reduce regulatory risk, and strengthen internal controls.
Financial Benefits: Boosting the Bottom Line
Lenders using both Blanket VSI and Repossession/Remarketing programs benefit from:
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- Lower loan losses
- Higher net recovery values
- Reduced operational delays
- Fewer borrower disputes
- Stronger portfolio stability
- Improved loss forecasting
- Lower servicing costs
Even small efficiency gains across large auto portfolios can translate into significant annual savings.
Key Takeaway for Auto Lenders and Financial Institutions
Pairing Vendor’s Single Interest (VSI) with a Repossession and Remarketing program creates a unified, proactive risk-management strategy that strengthens loan servicing, reduces charge-offs, accelerates recoveries, and improves overall financial performance. Lenders who integrate these programs gain a more efficient servicing operation, a more resilient portfolio, and measurable improvements to their bottom line.
Learn more about our Vendor's Single Interest (Blanket VSI) and Repossession & Remarketing solutions today!