The Complete Guide to Automotive Reinsurance for Dealerships

The finance office has traditionally been measured by one primary metric: Profit Per Vehicle Retailed (PVR) . For decades, PVR has been the "North Star" for F&I managers and dealer principals alike. It’s the number that dominates the morning meetings, dictates the month-end bonuses, and serves as the ultimate yardstick for departmental success. However, after 25 years in this industry, I’ve seen a recurring pattern: dealerships that focus only on the immediate PVR often find themselves on a treadmill of high turnover, inconsistent performance, and missed financial opportunities. If you are only looking at the cash that hits your financial statement at the end of the month, you are looking at a snapshot when you should be looking at a feature film. At Elite FI Partners , we challenge our partners to shift their perspective. It’s time to move beyond the "monthly grind" and start viewing the F&I department as a powerful engine for long-term wealth constructio...

Every dealership’s success in F&I comes down to one thing: the partners and programs they choose. The difference between an average finance office and a wealth-building one isn’t luck — it’s about aligning with the right administrators, offering the right products, and building profit-sharing structures that actually deliver. At Elite FI Partners , we’ve built our reputation on guiding dealers through that process with clarity, transparency, and proven results. The Criteria for Selecting Administrators The right administrator can make or break the dealer and customer experience. That’s why we carefully evaluate administrators based on: Claims Management & Support – We only partner with administrators who consistently deliver fast, fair, and customer-friendly claims outcomes. Compliance & Transparency – Every program we bring into a dealership is fully vetted for compliance with state and federal regulations . Training & Support – Administrators must ...

Why Reinsurance Matters More Than Ever For years, dealerships relied on product sales as their main source of F&I income. While profitable, these transactions often left long-term wealth on the table. At Elite FI Partners, Emilia and I set out to change that. Our goal is simple: help dealers take ownership of their financial future through transparent and effective dealer reinsurance strategies. Automotive Reinsurance as a Cornerstone of Growth Reinsurance is not just a financial tool; it is the foundation of long-term dealer wealth. By creating structures that allow dealerships to participate directly in the underwriting profit, automotive reinsurance transforms F&I from a transactional model into a wealth-building engine. The key is clarity. We provide side-by-side comparisons and pro forma analysis so dealers understand exactly how these structures work and what they mean for their bottom line. F&I Reinsurance Options Tailored for Every Dealer Not every program is...

As dealerships continue to evolve their F&I strategy, more principals and general managers are exploring dealer reinsurance not just as a profit tool but as a long-term wealth-building strategy. One of the most powerful tax advantages available within reinsurance is the 831(b) election, a provision in the U.S. tax code that allows qualifying insurance companies to be taxed only on their investment income, not the premiums they collect, up to a defined annual limit. For the 2025 tax year, the IRS has set the 831(b) premium cap at $2.85 million. This means that if your dealer-owned reinsurance company collects less than that amount in premium and meets certain compliance standards, it may qualify for this election. The relevant IRS language reads: “In the case of a qualifying insurance company, if the net written premiums (or, if greater, direct written premiums) for the taxable year do not exceed $2,850,000, the taxable income of the company shall be taxable only on income other th...

I want to discuss the basics of how to set up a reinsurance program . Many dealers have heard about reinsurance, but it can seem complicated or out of reach. Once you hit the right contract volume, getting started is straightforward. My goal here is to give you a clear roadmap from building your volume to choosing the right structure so you can move from leaving money on the table to building long-term wealth through reinsurance. Step 1: Building Your Volume (Start Where You Are) Reinsurance works best once your dealership is consistently writing about 20 to 25 service contracts per month. That volume gives you the scale needed for underwriting profits and investment income to build real wealth over time. If you are not there yet, that is okay. Many dealers start with a retro profit-sharing program. This allows you to share in profits immediately while you build toward full reinsurance. It serves as a stepping stone, keeping you engaged with the back end instead of leaving everything t...