A dealership’s profits come from its vehicle sales, and parts and services sales. They also profit from F&I products like extended service contracts and battery replacement programs, among others, but not as much as when they own their own Reinsurance Company. How do dealerships earn from their own Reinsurance Company?
Dealer-owned reinsurance business
Dealerships usually offer F&I products to their customers from a third-party provider. What this means for your customers is that…
- The third-party provider offers pre-existing packages, without necessarily considering your customers’ and dealership’s unique needs
- Claims will be accepted or denied based on the third-party provider’s discretion
- Claims processing may take weeks or months, sometimes longer
- Premiums will go directly to the third-party provider
So, with a third-party provider, dealerships don’t have much control over their F&I products and services. But with a dealer-owned reinsurance business, dealerships have more control over their F&I services, and since they know their customers better than any other third-party provider, they are in a better position to know what their customers need and want, and what will make vehicle ownership more enjoyable and fulfilling for them.
What makes a good reinsurance company?
Now that you’ve decided to open your own reinsurance business, it’s important to choose a partner whose goals, ideals, and corporate culture are aligned with yours. The right partner will help you grow your business. The wrong one could make you lose your business and your customers.
So to answer the question above, having the right reinsurance program provider is a good place to start.
Next, your F&I product offerings should address specific issues that your customers will encounter during their ownership. From damaged tires to stolen motorcycles, scheduled maintenance and more, your reinsurance F&I packages should be flexible enough to be customized according to each customer’s needs.
Last but not the least, the claims process. Now that you have more control over your F&I products, you now also have more control over the claims your customers will file. When in the past claims approval depended on the third-party provider, now you will get to approve your customers’ claims. This means that their claims won’t be automatically rejected because of some technicality that the provider found. You have sole authority on the matter when you have your own reinsurance company.
To reiterate, these are the top factors that make for a good Reinsurance Company:
- Good reinsurance program provider and partner
- Flexible F&I products and packages
- More customer-centric claims approval process
Are you looking for a reinsurance program provider that has you and your customers best interests at heart? Please feel free to contact Torque Group at (800) 859-0590. We’d be glad to discuss your options with you.
