Understand what the lender provides
Some financing arrangements include or charge for vehicle protection. Others require the dealership to arrange its own coverage. Read what the program covers, whose interest it protects and whether it meets your needs beyond the lender’s balance.
Check physical locations, transportation, newly acquired units, reporting deadlines, deductibles and excluded causes of loss. Do not assume protection applies to inventory you paid for outright or vehicles financed elsewhere.
Compare it with your own inventory policy
Ask how the proposed dealer open lot policy interacts with lender-provided coverage. You want to understand both overlap and gaps. Have the agent review any loss-payee wording, required limits and cancellation provisions.
Keep acquisition, payoff and inventory records current. A car can change financing status while it remains on the same lot; insurance should be reviewed around that change.
Plan for a large loss
Look at the highest total inventory value you expect to carry and the deductible you would owe after a storm affecting several units. Ask how claim payments are allocated between the dealership and lender.
Inventory protection alone does not address all dealership liability, property, employee or income exposures. Review the rest of your business alongside the lender’s requirements.