By Ryan Hanlon
When we discuss reinsurance with RV dealers, we tend to focus on how various structures and programs can benefit them and their dealership, from their personal financial position to their sales, F&I and service departments.
But that is not the end of the conversation. Let’s discuss three ways forming a reinsurance company can improve the customer experience you deliver — at the dealership and beyond.
1. More Products, More Protection
Service contracts, GAP coverage, prepaid maintenance, appearance protection and theft deterrence and recovery products help customers avoid unexpected expenses and keep their RVs looking and working better for longer.
RV dealers who are new to reinsurance are often surprised, if not shocked, by the transformative effect their program can have on their F&I department. Increases in product sales and gross profit are a byproduct of great training provided by quality income development agents. But the benefits don’t stop there.
When you are earning money from underwriting profits as well as product sales, there is more at stake and more incentive to properly present every product to every customer. When your penetration rates are high, cancellations are rare and compliance standards are met, everyone benefits.
Simply put, more product sales means more customers are protecting their investments. It’s the ultimate win-win.
2. Reliable Service
In a recent entry, we discussed service contract tieback provisions, which bring customers back to your dealership or a facility in your repair network when breakdowns occur within a predetermined radius.
The effects on your service absorption rate and dealership profitability are self-evident. But tiebacks also help ensure your customers get complete, competently executed repairs. They also get the peace of mind that comes with knowing help will almost always be within reach, however far they travel.
3. Stability
The stabilizing effect reinsurance can have on an RV dealership cannot be overstated. Reinsurance helps dealers stay in business for the long haul, adding revenue and operating capital you can use to grow your business in good times or save your business in bad times.
No less important is the critical role reinsurance can play in your succession planning. You can form additional reinsurance companies for family members to give them a stake in the dealership’s performance while you maintain ownership of the dealership itself. And if the worst should happen, you will leave behind a financial asset your family can use as a bridge to pay expenses, including estate taxes, and keep the business afloat.
Consumers prefer to do business with reliable, reputable companies. There is no substitute for stability and longevity. This is especially true for RV dealers. You are a member of your community, running a highly visible business that relies on its reputation for sustained success.
If you are still on the fence about reinsurance or have questions or concerns about your current program, we are always available for a quiet, confidential conversation. Please feel free to reach out today.
Ryan Hanlon is a managing director for Portfolio, a leading provider of reinsurance and F&I programs for RV dealers, and a 16-year industry veteran. For more information or to schedule a confidential consultation with a Portfolio reinsurance expert, email inquiry@portfolioco.com today.
