Insurance Companies Make Billion$ Off Car Dealers Each Year! How Can The Dealer Keep That "Food" On Their Own Plate?
When a dealer sells a car they have to report that sale to the DMV and in many states, and according to a NY dealer friend of mine, he’s got 4 days to let the state know. There are many important requirements that must be fulfilled before the transaction can be declared complete and the dealer can relieve themselves of the financial responsibility of that sold unit.
This is where the insurance companies set up shop: Just on the other side of the sale. State law requires dealers to report information about each transaction and that information is easily purchased by companies seeking additional up-sell opportunities. One dealer even told me that he has customers calling his dealership back to cancel back end contracts stating that they received a phone call from a competing company offering additional services at the same rate. I’m not really sure what image comes to mind when you experience that, but the image above is the one the dealer gave me.
How then can the dealer capture that revenue for themselves? If you’ve read any of my articles, you know that I represent a company that is gaining awareness on a national level and creating highly engaged interest across two major sectors of our economy: Insurance and Automotive. Owning your own insurance agency inside your dealership will create an umbilical cord to the customer through a dealer owned book of business that could potentially be worth more than the dealership itself within just a few short years.
The dealer can now possess the same access to an additional revenue stream (commissions on new and renewal policies) that can add 10-15% in compounding and recurring net profit just from the dealership’s existing customer base. The dealer will then have an actual reason to follow up with their customer(s) every 6 or 12 months to renew/adjust a policy in addition to offering additional purchase opportunities for a new car, or other products. Dealers will be able to notify customers of potential rate increases, and offer them lower rates from different carriers they also represent. This will enable them to keep the customer as an insurance clients regardless of which insurance carrier they use. (provided the dealer agency is appointed by the carrier) Dealers can create better customer loyalty and customer service ratings for solving another customer’s problem. They can better utilize staff and reduce employee downtime and turnover by creating additional revenue streams for their employees. Dealers will be better able to ensure that no car sales are lost because the customer was unable to secure proper insurance.
Installing an in-dealership agency will give the dealer’s customer a convenient, familiar and friendly environment where they can pay premiums on policies they hold just by visiting the dealership’s on site agency. These services also give the customer peace of mind should the need arise for them to file a claim simply by calling the dealership and asking to speak to their insurance specialist.
Dealers will also have a new sale opportunity in the event that a customer gets into an accident. The dealership agency is required to receive an alert immediately after the customer is in an accident, known as “First Notice Of Loss“ which will give the dealership first option to provide the towing for the damaged or immobile vehicle and provide new purchase options with familiar dealership personnel and on site inventory. This will also expedite the claims process and reduce potential litigation issues due to the speed and efficiency in which the customer is presented with a settlement offer while simultaneously being allocated a replacement vehicle.
By providing access to independent insurance companies, insurance and automotive sales experts, and cutting-edge technology, Atlas Dealer Services will ensure that each dealership agency achieves a high conversion ratio, high cross-sell percentage, and high retention ratio. For more information about the in-dealership insurance agency model, feel free to call Kevin Bradberry at 813-477-0297
©Copyright 2018 All Rights Reserved. Article written by Kevin Bradberry of Atlas Dealer Services.