Increase F&I Revenue with Your Own Powersports Dealership Reinsurance Company
F&I after-sales products like GAP or Total Loss Protection, Tire and Wheel Protection, Lifetime Battery Replacement, and Dealership Maintenance Program, among others, are offered to customers to make their ownership experience enjoyable and stress-free. These are offered through a third-party provider. A Powersports Dealership Reinsurance Company transfers control of these after-sales products from the third-party provider to the dealership.
When they have more control of their F&I solutions, dealerships can provide a more enriching and satisfying ownership experience to their customers.
F&I Revenue
In a typical set-up, dealerships earn from the F&I products they offer customers through a commission given by the third-party provider. The more products they sell, the higher the profit they earn. This is why it’s important for dealerships to be highly selective when it comes to who they let manage their F&I department and the agents that will be working side-by-side with them. In a nutshell, a dealership’s F&I department is its heart and soul. It’s where most the business’ profits come from.
Be that as it may, what the dealership earns through commissions is but a small portion of what they could potentially earn if they were managing their own Powersports Dealership Reinsurance Company.
How does a dealership earn from their reinsurance business?
To be able to fully comprehend the profit potential of a reinsurance company, one must first know how it works. A dealership partners with an F&I solutions provider that also offers a reinsurance program. Bear in mind that not all providers offer this type of program so, you may have to do a bit of research to find one that best fits your business structure and your demographic. Once you’ve entered into a reinsurance program agreement with a provider of your choice, you will be given full control of your F&I products.
What this means is that you will get to tailor packages according to each customer’s unique needs, and you will get to decide which claims to approve and deny. When it comes to premiums, payments made by your customers will now go directly to you instead of the F&I provider, and you won’t be earning through commissions anymore. With reinsurance, you will get a share of the underwriting profits, and whatever is left of the premiums from products that have matured is now yours.
When choosing a provider, check to see if they offer flexibility in terms of customizing packages for your customers. Likewise, check if you are given control over the money, i.e. if you are allowed to borrow against the premiums for investment purposes or other reasons.
Talk to Torque Group today about setting up your own Powersports Dealership Reinsurance Company
Have you been thinking about establishing your own powersports reinsurance company? Please feel free to contact Torque Group at (800) 859-0590. We’d be glad to discuss reinsurance program options with you.
