Even though dealers have been participating in the underwriting profits of the products they sell for more than 30 years, we’ve found that most haven’t given a tremendous amount of effort to maximizing the available programs. At first glance these programs may seem complex with different structures, insurance carriers and tax implications. ADG can help you navigate these programs and make sure the choices you make are optimal for your dealership and business strategy.
The primary types of dealer income participation are:
Self-insured: We can show you legal and insured ways to hold the reserves for the products you sell. The advantages include allowing you to offset floor plan accounts, improve liquidity or control investment choices.
Retrospective: With no set-up costs, no annual expenses to consider and no tax implications involved, retrospectives offer the easiest mechanism for a dealer to participate in the underwriting profit and corresponding investment income of the products they sell.
Reinsurance: For dealers who want to earn the highest return available from underwriting profit and investment income. owning a reinsurance company can have additional benefits such as preferential tax treatment, estate planning and key employee retention.
Most F & I products play a role in a wealth development. However, many programs are subject to cost and income sharing provisions that unnecessarily inhibit dealer’s income. ADG’s experience will help you analyze programs and make choices that are best for you and your customers.