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How Offering Your Own VSCs and Giving Warranties Benefits You, Your Customer & Your Bottomline

Vehicle Service Contracts are sold to customers above and beyond the price of the vehicle. For independent and BHPH dealers, vehicle service contracts help you to control the customer’s ownership experience in a favorable manner, by protecting them from costly repair bills, which helps you to receive repeat and referral business.

Vehicle service contracts are also one of the most lucrative products for you, the dealer. to sell your customer. The best way to maximize profit is to reinsure these contracts in your dealer owned reinsurance company. This is very similar to owning a warranty company solely for your store and your customers. Your reinsurance company allows you to capture the  underwriting profit you were originally sending to your warranty company. This can translate into tens of thousands or hundreds of thousands of dollars annually based on your volume and loss ratio!

If they (your warranty company) weren’t making a profit off of you or if they were taking a loss, why would they continue to do business with you? Right now you are only earning a commission for (retail profit) for selling their product. By starting a reinsurance company you can earn their underwriting profit too!

For BHPH dealers, vehicle service contract premiums are financed over the term so you are billed monthly as you receive payments from the customer. This ensures that you are not hurting your cash flow and lending pool. The contract is still reinsured so you capture all underwriting profit at the end of the term of the contract.

Here are 3 ways that Vehicle Service Contracts benefit your dealership as a whole:

1. Capture Profit Not Spent On Claims

2. Control Customer’s Ownership Experience

3. Stop Paying Denied Warranty Company Claims Out Of Pocket
Let us help you increase profits and have your customer love you even more! 

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