Participation

Participation is a way for dealers to share in the profits generated from the F&I products they sell, such as service contracts, GPS, or protection plans. Instead of all underwriting profits going to the provider or administrator, participation programs allow dealers to capture and build long-term wealth from their own sales. There are several structures we offer, each with different levels of control, risk, and reward.

PROFIT SHARING

Profit sharing allows dealers to participate in the earnings from the F&I products they sell. Every time a customer purchases a service contract, GPS, or protection plan, a portion of the money is set aside for future claims. If paid claims are less than what was collected and earned, the difference is profit. Through profit sharing, dealers get a percentage of that profit instead of leaving it all with the provider.

Why it matters for dealers? It’s a simple way to generate extra income without added risk or setup costs, making it a strong entry point into participation programs.

REINSURANCE

Reinsurance is one of the most powerful tools for dealers to build wealth. With reinsurance, the dealer owns a company that reinsures the F&I products sold in their store. That company receives the underwriting profits and investment income, profits that would normally go to an outside provider.

CFC (Controlled Foreign Corporation): A dealer-owned reinsurance company based offshore. Provides maximum tax advantages and long-term wealth-building opportunities.
NCFC (Non-Controlled Foreign Corporation): A shared structure where dealers own a piece of a larger company. Easier to manage and lower overhead, but with less direct control compared to a CFC.
Super CFC (Controlled Foreign Corporation): A hybrid model combining the benefits of CFC and NCFC. Dealers get more control and ownership than an NCFC without taking on all the administrative responsibility of a standalone CFC.

DOWC

A dealer owned warranty company (DOWC) gives the dealer full ownership and branding of their own warranty business. Instead of selling another provider’s product, the dealer becomes the obligor, meaning the warranty is issued under the dealer’s name.

Maximum control over claims and customer experience.
Products are branded to the dealership, strengthening customer loyalty.
Dealer captures both underwriting profits and investment income.
Higher responsibility and compliance requirements since the dealer takes on more risk.
Access to capital

DEALER INCENTIVE PROGRAM

A dealer incentive program is the simplest form of participation. Dealers receive periodic payments (bonuses or “retros”) from the provider or administrator based on how profitable their contracts are.

No risk or setup costs.
Easy to implement immediately.
Payments are tied directly to product performance.
Less lucrative in the long term compared to reinsurance or a DOWC.