It’s a well-known fact that a dealership’s bread and butter isn’t its vehicle sales, whether new or used, but rather, it’s parts and services products. Coming in a close second is its F&I solutions. Typically, a dealership earns a commission for every F&I product sold from a third-party provider. A Powersports Dealership Reinsurance Program offers higher income from F&I sales.
How does it work?
Basically, a Powersports Dealership Reinsurance Program allows dealerships to establish their own reinsurance business, thereby giving them more control over the F&I products they offer customers. Premiums paid for the F&I product, whether a Dealership Maintenance Program, GAP or Total Loss protection, or other similar products, will now go to the dealerships reinsurance fund instead of to the third-party provider.
Income earned from the reinsurance business can then be used to further grow the business either by offering more vehicle selections or putting up another branch in a different location. It can also be used to diversify the dealership’s financial portfolio by investing in equities or other investment tools.
Choosing the right partner and products
A critical factor in the success of your reinsurance business is your choice of provider. It’s important that the provider understands your business and your customers. Dealerships cater to different customer demographics based on location, types of vehicles offered, and lifestyle. Understanding that customers for a Powersports dealership are vastly different from customers buying from a “regular” dealership is important as they need to tailor the F&I solutions to your customers’ needs.
Some providers could try to convince you to take all the F&I products they are offering, saying with more products, you will earn more. But actually, products that aren’t a good fit to your customers could only expose you to unnecessary risks and may result in losses. So when choosing a reinsurance partner, make sure they have the flexibility to customize F&I solutions according to your dealership’s needs.
If you want your reinsurance business to keep you afloat when sales are down, your choice of partner and products is important.
Get your F&I manager, accountant, and lawyer involved
One of the most common mistakes dealerships makes with regard to reinsurance is they go into it without fully discussing the details of the program with their accountant, lawyer, and F&I manager. These are key people in your loop that can help determine whether or not a particular Powersports Dealership Reinsurance Program is the right fit for you.
Talk to Torque Group today about their Powersports Dealership Reinsurance Program
Got more questions about Powersports Dealer Reinsurance? Please feel free to contact Torque Group at (800) 859-0590.
