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2018-02-22  Tax Season 2018 - Position Yourself for Success

By Tim Byrd



Tax season is upon us.

You have been working diligently for months to gather the right inventory to make this the best tax season ever.

Let me ask you this: Do you have your own insurance company? You know, a dealer-owned reinsurance company?

Maybe you have not heard of reinsurance. Or maybe you have and it is just out of your wheelhouse. You don't understand it and you’re a little afraid of something outside of your purview.

You are a Buy Here-Pay Here dealer. I am sure you have folks all the time trying to sell you the perfect widget to solve all your problems.

The fact is, I have been in the car business for nearly 30 years and can say with confidence that nothing related to the car business has a greater impact and greater return on investment than a dealer-owned reinsurance company.

Follow my logic for a moment.

The lifeblood of any BHPH operation is the collection of payments. If your customer's vehicle is repossessed, there are no more payments.

Every state has its own rules regarding repossession, but you as the lender have a security interest and can repossess a vehicle without notice if your customer defaults on the loan.

Many things can constitute a default, but the most common reasons are not making timely loan payments and not having car insurance.

It’s well known in our industry that if the car does not run, the customer is not going to make timely payments. And if the customer driving around without insurance, that violates the terms of your agreement.

Mechanical breakdowns and lapsed insurance account for about two-thirds of all repossessions. The other third is caused by life events, over which we have very little control.

A dealer-owned reinsurance company puts you in the driver's seat to be a better, more profitable dealer. You can position yourself to provide solutions before problems ever occur.

In addition, your customers are collectively funding the premium to your insurance company to cover mechanical breakdowns and collateral protection. Collateral protection and a vehicle service contract are, in most cases, less per month than a customer would pay for car insurance.

Collateral protection and vehicle service contracts funded by monthly payments into your insurance company by your customers is mutually beneficial.

Sounds like a great plan doesn't it? All you need is someone who has been helping dealers manage programs like that for more than two decades to give you the comfort level to get started.

After you see how easy it truly is, you will say what we have heard over and over again: “I wish I had done this years ago.”

Position yourself for tax season – and every season – with your dealer-owned reinsurance company.


Tim Byrd is founder and president of DealerRE, with more than 25 years of experience in the auto industry. He can be reached at or by calling (804) 824-9533.