Profit Participation Options

We don’t just share the risk. We share the reward.

Dealers who have large product portfolios have many insurance options open to them. Dealers have successfully reinsured Vehicle Service Contracts, Credit Life, Accident and Health for decades. Many dealers now want to expand their reinsurance companies to accept aftermarket products such as Tire & Wheel, Gap, Anti-Theft, Appearance Protection, among others.  Direct Dealer services can assist our dealers in setting up DOWC’s (Dealer Owned Warranty Company), CFC’s (Controlled Foreign Corporation), NCFC’s (Non Controlled Foreign Corporation).  No matter what your need my be, you can count on Direct Dealer services to help you find the right strategy and make sure all aftermarket products can be reinsured creating unparalleled wealth building opportunities for your dealership.  Below is a description of some of the options available.

Fully Insured – All products offered by Direct Dealer Services are fully insured. This simply means that the administrator is the obligor. This is the most common insurance option for most dealerships. There is very low risk and the administrator is the sole obligor. Many dealerships prefer the safety of being fully insured as they have no exposure to paying claims.  Under this scenario dealers do not share in any unused back end reserves or investment income.

Self Insured – If a partner prefers to maintain the reserve proceeds.  Direct Dealer services can make that happen. The dealership simply pays for all covered claims against the contract and retains any portion not used as profit. The dealership pays a small administration fee for the contract so a third party administrator can take all claims inquiries making it so the  dealership does not have to hire additional personnel.  The dealer is the obligor.

Retro Dealer Participation – Many of our strategic partners offer programs that offer rewards for larger volumes of products sold. There is no upfront cost to participate in these programs. When you sell enough of a particular product to qualify, you will receive a portion of the unused reserves.  This is a great alternative to reinsurance for those not wanting to make a larger investment. What makes a retro plan attractive is the fact that even some fully insured products still qualify for this type of program.

Reinsured Programs – Off shore reinsurance is a great way for a dealer to invest in the future.  These programs are structured as CFC’s (Controlled Foreign Corporation), or NCFC’s (Non Controlled Foreign Corporation).  Volume and tax issues determine which direction is best for a particular dealer.  Direct Dealer services can set up a reinsurance position on nearly any product. We can help in creating the new company for reinsurance and help advise the dealer which products to place in the reinsurance position. Reinsurance is a great way for dealerships to create a higher return by investing in the products sold by their finance and insurance departments.

Dealer Owned Warranty Company-DOWC’s as they are called are structured much like Reinsured programs but with some unique advantages such as being domiciled as a U.S. corporation, more direct control of funds and investment options.  This is an option well worth looking at for many dealers.

Direct Dealer Services can help you navigate to just the right program for you.  Contact one of our team members today!

DON’T LET THIS UNPARALLELED WEALTH-BUILDING OPPORTUNITY PASS YOU BY.