Polly says insurance savings can offset 90% of car buyers’ negative equity

Polly’s Q2 2026 Embedded Auto Insurance Report says buyers who shop insurance can use savings to cover most of their trade-in debt, even as average negative equity hits a record second-quarter high. The report also says insurance quoting boosts dealership F&I gross without slowing deal completion.

Why it matters: - Car buyers are carrying near-record trade-in debt, and Polly says insurance savings can help close that gap. - Dealers are also getting a measurable F&I lift from insurance engagement, which could make quoting insurance a more valuable part of the sales process. - The report lands as national insurance rates ease, but most states still have much higher quote levels than they did five years ago.

What happened: - Polly released its Q2 2026 Quarterly Embedded Auto Insurance Report. - The report says insurance savings can offset 90% of the average negative equity balance for car buyers. - Polly said buyers who saved with its platform averaged $1,245 in annual insurance savings in Q2 2026. - That savings level equals about $6,223 in buying power, or 90% of the average negative equity balance. - Edmunds said average negative equity reached $6,884 in Q2, the highest second-quarter figure on record.

The details: - Dealerships that introduced insurance quotes during the purchase process saw a 20% lift in F&I gross. - That translated to $322 more per transaction versus deals with no insurance engagement. - Deals where customers purchased insurance saw a 32% increase in F&I gross. - Those transactions produced $523 more per deal. - The report examined 661,486 retail sales from DMS feeds at 216 dealerships. - Median time from deal open to deal finalization was the same whether or not the buyer received a Polly insurance quote. - Quoted deals were less likely to drag on. - Only 13% of Polly quoted deals took more than a week to finalize, compared with 16% of deals with no insurance quotes. - Among Polly’s top-performing dealership partners, F&I lift over the past 12 months ranged from 7% to 62%. - Half of the top 10 high-engagement dealerships saw lift of 19% or higher across makes, markets and franchise types. - The top-performing dealership, a Nissan franchise in the Northeast, posted a 62% lift in back-end gross, or $1,391 more per deal. - Median monthly insurance quotes continued to ease in Q2 2026. - Of the 36 states with tracked quote volume since 2021, 34 still had higher quote levels than five years ago. - New Jersey buyers are quoted 127% more than in 2021. - New York buyers are quoted 123% more than in 2021. - Washington buyers are quoted 107% more than in 2021. - Tennessee buyers are quoted 98% more than in 2021.

Between the lines: - The report suggests insurance quoting is doing double duty for dealers: helping shoppers absorb negative equity and lifting back-end profit. - The unchanged deal finalization time weakens the argument that insurance quoting adds friction to the sales process. - State-level quote inflation remains a consumer pain point even as the national trend cools. - Chris Pres, Polly vice president of automotive, said insurance engagement is one of the few levers dealers can pull that consistently improves deal outcomes without adding friction.

What's next: - Polly said the full Q2 2026 Quarterly Embedded Auto Insurance Report is available now. - Dealers may use the findings to expand insurance quoting as a standard part of the desk process. - Consumers facing negative equity may have more reason to compare insurance quotes during the purchase process.

The bottom line: - Polly’s latest report frames embedded insurance as both a consumer savings tool and a dealership profit lever.