Dealerships earn more from the Parts and Services department of their office than their average daily sales. This is because parts and services are what keep customers coming back long after they’ve bought their vehicle from you, shares one of the most trusted Powersports Reinsurance partners in the industry, Torque Group.
Dealerships hardly make a profit from their F&I programs, but with Reinsurance, they can finally get a share of the profits from their F&I programs like extended service contracts, tire and wheel protection, total loss protection, and so on.
How does Reinsurance work?
A dealership partners with an F&I provider to open their own Reinsurance company. This will give them more control over their F&I product offerings, including the claims and reimbursement requirements and process, which is an important factor in customer retention.
When an F&I customer pays their premium, this money will then go to the Reinsurance company instead of the F&I solutions provider. Whatever is left from these premiums after each contract has expired will then go into the dealership’s profits and/or funds.
Powersports Reinsurance partners
For a dealership to truly benefit from its own Reinsurance company, it needs the right F&I partner first. Here are a few tips on finding the right Powersports Reinsurance partner for your dealership:
1. Background and reputation
When it comes to Powersports Reinsurance partners, it’s not enough that the company you’re looking to partner with is a big name in the industry. You must look beyond the popularity and investigate their background and reputation. Pay particular attention to their company culture, how they treat their employees, their practices, and their customer support service. An F&I provider that is well-known for taking care of their employees and their customers could make an ideal business partner.
2. Profit sharing
There are two ways that a dealership can directly earn from Reinsurance. First, they can open their own Reinsurance company and offer F&I solutions from a third-party provider, but with the agreement that they can determine their own pricing, coverage, and claims. The F&I provider underwrites the products and earn a portion of the profits. The risk, however, usually falls solely on the dealership.
Another way an F&I provider earns from Reinsurance is through “Capped Reinsurance,” which means the dealership will pay a premium to the F&I provider, so the latter can assume some of the risk that usually comes from extended service programs and other similar contracts.
3. F&I products
Last but not the least are the provider’s F&I products. What they’re offering should be aligned with your goals in terms of providing after-sales services to your customers. Consider the terms and inclusions and how they will benefit your customers.
Got more questions about Powersports Reinsurance partners? Please call Torque Group at (800) 859-0590. Can’t wait to get started? Sign Up today.
