By Dan Daggett
COO
Credit Unions First
For years, Vehicle Service Contracts (VSCs) have been a reliable product for protecting members—and a profitable one for the providers behind them. But there’s a problem: in most cases, the credit union doesn’t see the profit. Traditional VSC programs funnel underwriting gains and claims control to third parties, leaving credit unions with only a modest markup and little transparency into how member claims are handled.
At Credit Unions First, we saw that imbalance and asked a simple question:
Why should others profit from a product your members buy and your reputation supports?
That lack of control and transparency is precisely what Credit Unions First set out to change.
A Smarter Model: The Credit Union–Owned Vehicle Service Contract
We developed the Credit Union–Owned Vehicle Service Contract (CU-Owned VSC) program to give credit unions the same advantages that auto dealerships have long leveraged —ownership, control, and profit retention.
With a CU-Owned VSC, credit unions gain the ability to:
- Control premium funds and claims decisions
- Retain 100% of underwriting profit
- Reinvest those earnings into member value and institutional strength
Our model’s superior coverages are built with members in mind – fewer exclusions, faster claims turnaround, and transparent processes that strengthen trust rather than erode it.
Results That Speak for Themselves
Credit unions implementing this model typically see:
- Increase non-interest income by 10% or more
- Faster, fairer claim resolutions for members
- Stronger member relationships as loan officers can confidently offer coverage that truly protects
- Reduced charge-offs due to denied or delayed claims
- Greater institutional profitability that funds dividends, community programs, and long-term stability
Side-by-side comparisons show it clearly:
Traditional VSCs deliver profit to the provider.
Our CU-Owned VSC returns it to the credit union and its members.
On the left, this is a traditional VSC program. The right shows the Credit Unions First model.
Both show a cost to the member of $1700 ($1,100 premium to pay claims + $400 CU markup + $200 Admin Fee)
* this is an example as premium, markup and admin fee are all variable
These charts highlight the opportunity for underwriting profit for the credit union.
TRADITIONAL CHART
OUR CHART
Returning Value Where It Belongs
This concept isn’t new, it’s proven. Auto dealers have built entire revenue strategies around owning their VSC programs. If dealerships can do it to increase profit and customer retention, why shouldn’t credit unions, whose very mission is to return value to members, do the same?
With Credit Unions First, credit unions finally can.
See for yourself with our Vehicle Service Contract calculator.
Want more information? Contact us here.
About the Author:
Dan Daggett
COO
Credit Unions First
Dan Daggett has been a Change Agent for his entire 30-year Credit Union career. Having been a Credit Union CEO, CUSO CEO and owner of Daggett Enterprises USA he knows the issues Credit Union and CUSO’s face daily, and he has the knowledge to help address those issues. One of Dan’s strongest qualities is his ability to listen and ask questions to determine a path to find solutions to his client’s needs. At Credit Union’s First Dan will not stop creating Disruptive products and programs that give control back to the Credit Unions he and the CU 1st Team serve.