Auto dealer reinsurance is a burgeoning business idea that's gaining momentum among automobile dealer principals, and general managers. Reinsurance is a customized insurance product designed to enable auto dealers to provide customized products to customers. The business aims to increase your long-term revenue growth.

What are the different types of Dealer-Owned Reinsurance Companies?

Auto dealers nursing the idea of starting dealer-owned reinsurance companies have several choices to consider:

1. First is a controlled foreign corporation (CFC) structure. This is a favorite choice among dealers because they can control assets and claims.
2. Second is the dealer-owned warranty company, which is a safer and more efficient alternative to the CFC structure. The effectiveness and usefulness of this reinsurance structure, however, depends on the long-term goals of the dealer. Which allows total control for the dealer.
3. The third and last choice is the affiliated reinsurance company. It's highly preferred by dealerships of all sizes because it offers friendly tax benefits.

Why should a dealer consider becoming a Dealer-Owned Reinsurance Company? What are the benefits?

Automobile companies looking to venture into dealer reinsurance have a lot to benefit from and little to lose. These business structures are profitable ventures that promise to keep your risks in check and profits higher.

1. Client Satisfaction — dealer-owned reinsurance company owners are in total control of their insurance and warranty claims. You have control of your customers' experiences, so you can keep them happy and increase your company's growth.
2. Maximizes profit and cash flow — as a reinsurance company owner, you'll always earn the premium reserves that third-party and insurance providers make when unused claims are paid out. Reinsurance companies are profitable sources of income and excellent profit creation sources.
3. Allows you to customize terms and policies to your liking — a reinsurance company enables auto dealers to personalize their terms and coverage to maximize profits.

For further details about becoming a Reinsurance Company, contact us.