Vendor's single interest (VSI) - Mike Felder Insurance

1647 Willow Pass Rd, Suite 347, Concord, CA 94520
Phone Toll free in California 800-7-CYCLES
California's Largest Motorcycle Insurance Agency

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VSI (Vendors Single Interest) -------------------------------------------------------------------------------- If I had to estimate the amount of new cycles that are purchased through financing, I would guess it is close to 80%. That statistic doesn't mean anything other than the fact that all of those cycles need to be insured to keep up the buyer's part of the contract. Whoever the loan institute was that is supplying the funds for the purchase is, they snuck in a sentence somewhere on page 529, Article 51, paragraph 78, section 34, that requires insurance. The wording will be something that translates into the following.... "we paid for your cycle so you better pay for insurance or we will go out and stick some insurance on it for you and make you pay for it and if you don't, we are not going to give you the pink slip when you are done making the payments!!" In reality, if you are financing a cycle, it actually belongs to the bank, credit union, loan company, or whoever it was who gave you the money. It is only through their benevolence that they are letting you ride it around town. They want their cycle covered against theft and collision. If it gets stolen, they know you aren't going to feel sorry for them and keep making payments. And, should the worse happen, and the rider is killed in an accident, they definitely know your family and friends are not going to keep making the payments in your absence. So, they are pretty strict about this insurance thing. So strict in fact, that they have a special type of insurance for it. It is called VSI. Vendor's Single Interest insurance covers the balance of the loan. Read that sentence again. Go ahead, I'll wait.......It means that if your $6000 cycle has a balance on the loan of $750 and it is stolen, the VSI will pay off the $750. If you actually had your own insurance and the same thing happened, you would have been paid closer to the $7000 amount and you would then give your loan company the $750 to pay off the loan. VSI is the loan company's last alternative to choose after you as the customer decide to let your policy lapse. VSI is not in your best interest. Even if it the only coverage you can get, it still does not offer you the liability you are required by the state to have. It just insures the balance on the loan. It will not give you any kind of liability coverage to handle any damage to anyone you may have the misfortune of hitting. You will be responsible for that. I have had several people ask me why they were given a bill when they finished paying off their loan. Sometimes these bills have been as high as $4000! When I asked if they supplied insurance each year on their cycle, they responded no. It is hard thing to accept, but they were just handed a bill for the insurance that the lending institute supplied for the cycle. And if the person doesn't pay it, they never get ownership papers, or worse yet, the cycle is repossessed and all is lost. After paying a couple of thousand of dollars, it is pretty nasty to find out you still owe a couple of thousand. And don't be fooled into thinking that the loan company will take a couple of days and do some competitive shopping to find the best rate. The VSI is slapped on at going rates...no discounts..no nothing. The cost is placed right on the balance of your loan. And they can do that. After all, you said they could when you signed the contract! Just read Article 51, paragraph 78, section 34. Before you decide to cancel your insurance or let the loan company place it VSI on it for you, realize what the outcome is. Make some phone calls, get some competitive quotes. As always, the smart shopper is the well informed shopper!

Information in this article is probably correct as of the date it was written. Please check with your insurance agent or call Mike at 800-729-2537 before you make any life changing decisions based on what you read here. Comments are always welcome.