A better customer experience is straight ahead.
There are two ways CPI is available to your customer. Depending on what state you live in, you may offer it at time of sale or you may force place it to protect your interest in the vehicle against physical damage should the customer fail to obtain or maintain physical damage insurance as required in the credit agreement. The customer is responsible for the cost of the CPI premium. The product allows BHPH dealers and finance companies to protect their collateral and reduce risk in their portfolios.
The best news for you is this program can be reinsured in your own reinsurance company so that you capture all of the underwriting profits from this program. Instead of purchasing CPI or a similar product from a 3rd party vendor, depending on your book of business, you can send the premiums to your own insurance company and reap the rewards.
Vehicle service contracts, also known as extended warranties, 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 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 profit you were originally sending to your warranty company. If they weren’t making a profit off of you or taking a loss, why would they continue to do business with you?
For BHPH dealers vehicle service contracts the premium is 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.
Guaranteed Asset Protection, GAP, is a deficiency balance waiver that waives the difference between insurance settlement and loan balance if a customer’s vehicle is deemed a total loss due to unrecovered theft or collision. It’s one of the many products we offer as part of our reinsurance lineup! In BHPH, GAP is a no brainer!
Vendor Single Interest, VSI, protects the lender in the event that a vehicle is damaged or destroyed and the borrower did not have the necessary coverage. It also covers a loss due to the lender not being able to repossess the vehicle. VSI also covers losses due to skip tracing, towing and storage.
Debt Cancellation Coverage (DCC) is a reinsured waiver for buy here pay here dealers to sell their customers instead of having them carry full coverage insurance. In the case of a total loss DCC covers the total debt owed to the dealer which allows the dealer to get the customer into another car making payments again. The contract is reinsured allowing you to collect premium and reserve it in your dealer owned reinsurance company to pay claims. The total amount of premium you write minus claims is the underwriting profit you will capture instead of sending it to an insurance company. Stop paying employees to get your customers to pay someone else (the insurance company) and capture that premium for your self! Imagine your book of business paying you a premium every month. Profit builds fast!
DCC is usually significantly less expensive for the customer than full coverage insurance which allows helps find them money for their car payment and other coverages.
Customers must continue to carry liability insurance by state law!
Call us today for more information at (804) 824-9533!
We have been helping dealers with reinsurance for decades and have the experience to help our clients build the programs that are going to help them to be as profitable and successful as possible.
If you would like to know if reinsurance is right for you, just ask!