What opportunities does it provide my local dealership?
Buy Here Pay Here dealers have a massive opportunity to control their customer’s ownership experience, help their portfolio to grow and lower repo rates, and create new revenue streams with reinsurance through DealerRE. The BHPH dealership’s lifeblood is the customers making payments and we all know that they will not pay for a vehicle that does not run. So in most cases the dealer comes out of pocket to fix the customer’s vehicle to keep them on the road if they are a “good customer”.
If you were with a 3rd party and you sold 10 contracts and each cost $1000, they would make you send in $10,000 the next month. That would hurt the cash flow of your business. DealerRE allows you to pay the premium over the term of the contract helping you to stay cash flow positive.
What if there were another way to protect your collateral and collect a premium from the customer each month to do so, that would allow you to create a new revenue stream and make sure that your collateral risk is covered allowing you to sleep easier at night knowing your portfolio risk is mitigated and you’re making the profits that insurance companies were making off of your customers previously? DealerRE helps our clients do just that with collateral protection insurance and debt cancellation coverage.
Last but not least
An opportunity you may not recognize is what to do with remaining balances when your customer has had a total loss accident and you’ve received what you are going to get from the insurance company for the vehicle. A few dealers we have spoken with decide to go after the customer for the left-over balance, but as I’m sure you have guessed, that option is rarely fruitful and if anything, it alienates that customer from purchasing from you again. You spend a lot of money on marketing, why would you do anything that pushes customers away from you? So, most dealers we speak with tell me they forgive the balance and write it off as uncollectible in an effort to keep the customer and focus efforts on parts of the business that are more fruitful. This way of managing the problem is probably the one that makes the most sense for you, BUT, let us introduce you to the opportunity.
If you really think about that latter method of handling the left-over balances, you are providing GAP for the customer, you are just doing it for free.
Not only sell it to them, but do so through a reinsurance company so you get to keep all of the underwriting profits and you don’t have to deal with a 3rd party GAP company who is trying NOT to pay you…
Why do that when you could sell it to them?
Reinsurance for Franchise and Retail Dealers allows the dealer himself/herself to own an insurance company that will replace their third party or manufacturer provider for F&I Products.
This allows the dealer to provide warranties (certified or limited), loyalty programs (ie. engine for life), vehicle service contracts, pre-paid maintenance programs, and ancillary products (key, dent, windshield, theft, tire and wheel, etc) to their customers through their own insurance company.
In doing so, the dealer retains control over the customer’s ownership experience and is not depending on a third party to take care of the customer like they should when the customer has a claim. It also allows the dealer to capture and keep all of the profits that the third party or manufacturer was keeping on the sale of those products previously.
The dealer is able to maintain their gross on the back end of their F&I sales at the dealership AND capture all of the underwriting profits on their policies as they expire.
Reinsurance allows you as the dealer to maintain control and make more profit on the sale of each contract allowing you to take better care of your customers which will drive repeat and referral business.
DealerRE has been helping dealers set up reinsurance companies for decades and you can lean on our experience to help you put together the program you need to be as successful and profitable as possible. Give us a call today and we would be happy to do a business analysis for you and show you the opportunities you have with reinsurance to be a better, more profitable dealer. We can provide you with references and testimonials from our dealer clients just like you who say “I wish I had done this when I first started out.”
Give us a call today and we would be happy to do a business analysis for you and show you the opportunities you have with reinsurance to be a better, more profitable dealer. We can provide you with references and testimonials from our dealer clients just like you who say “I wish I had done this when I first started out.”
If you would like to know if reinsurance is right for you, just ask!