Powersports Dealership Reinsurance Program
If you own a dealership, you know that most of your profits come from your parts and services offerings. Sales from new and used vehicles only come in second. Knowing this bit of information, it’s time to rethink how you handle the F&I side of your business. Think about the income potential you’re practically throwing away by delegating the service contracts and other F&I programs to a third-party provider instead of managing these yourself.
In typical fashion, dealerships offer F&I solutions on behalf of a third-party provider. Then, when yourcustomer pays their premium, this automatically goes to the provider. And when their vehicle breaks down, and they want to file a claim for the repairs and whatnot, the “fate” of this claim solely depends on the discretion of the provider.
If they find that the service contract doesn’t cover the claim due to some technicality, then they won’t pay this claim, which means your customer won’t be able to reimburse what they spent on the repairs and/or service despite having a current extended service contract plan. This means bad news for you because you may have just lost what could have been a loyal customer, or worse, you lost a customer who’s been loyal to you for years.
Reinsurance Program for Powersports Dealerships
Torque Group’s reinsurance program provides dealerships with their own reinsurance company, which means they will have more control over their F&I products and sales. The most important thing to remember about reinsurance is that premiums paid by your customers will now go to your reinsurance company instead of to the third-party provider. Whatever is left from the premiums paid to you after the F&I products have matured will also be part of your earnings from your reinsurance company.
This translates to…
- Having a share of the underwriting profit
- Having more flexibility in terms of investing or utilizing reinsurance funds
- Being able to offer better customer service to your buyers and F&I customers
The above are simply the top benefits your dealership can enjoy from a reinsurance program. As you go along, you will find that there are several more benefits and advantages to having your own reinsurance company.
Some dealerships invest a portion of their reinsurance funds into equities, while others put up a second dealership.
What to remember about reinsurance
Powersports dealers must understand that reinsurance isn’t an instant profit-generating arm of their dealership. It will take time because you need to wait for the service contracts and other F&I programs to mature and consider the number of claims (and for how much) made each year. Additionally, putting a portion of the reinsurance funds in equity investment or a second dealership branch will take time before they can generate a profit.
The good news is that even when sales are down, your dealership will still earn an income or profit from your reinsurance company.
Talk to Torque Group today!
Are you ready to take your dealership to the next level? Do you wish there was a way to better serve your customers regarding the F&I products you offer? Ask Torque Group today about Reinsurance. You may reach Torque-Group at (800) 859-0590. Eager to get started? Sign Up today.