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D.O.W.C. Randall Rabbitt Executive Vice President, National Sales - PowerPoint PPT Presentation

Nov 14, 2023 •262 likes •525 views

DEA DEALER ER OWN WNED ED WA WARRANTY CORP. D.O.W.C. Randall Rabbitt Executive Vice President, National Sales Director Jim Smolich Chief Financial Officer Since 1975 Oldest licensed Warranty Company in Florida Inventors of

  1. DEA DEALER ER OWN WNED ED WA WARRANTY CORP. D.O.W.C.

  2. Randall Rabbitt Executive Vice President, National Sales Director Jim Smolich Chief Financial Officer

  3.  Since 1975  Oldest licensed Warranty Company in Florida  Inventors of D.O.W.C.’s

  4. WHAT IT IS Domestic onshore vehicle whereby you the Dealer has total control and captures the highest percentage of underwriting profit and investment income, available to the Dealer market, while providing the highest quality product to your customers.

  5. WHAT IT DOES Gives you the dealer, greater overall return of premium capital due to: Long Term Tax Deferral  Elimination of fees and taxes  Greater Investment returns  DOWC qualifies for insurance company treatment for federal tax purposes, allowing for taxation only on investment income if net written premium is less than $1.2 million. $0 Tax on underwriting profit with small insurance company status

  6. HOW IT’S DONE  You, the Dealer, are set up in your own Admin Obligor (AO) DOWC, which is perfect for your needs, goals and growth. You retain 100% of the underwriting profit and investment income.   All of the cash remains in your control, and all of the investment decisions are made by you.  You decide ownership, and all DOWC decisions are retained by you. There is no co-mingling of funds and you receive all of the benefits with no risk. Collectively we will design your program, customizing rates, coverages  (better than factory if you so choose) and marketing materials. We never touch/control your cash. YOU send YOUR money to YOUR  investment account, monthly or weekly.

  7. HOW IT’S DONE  We control 100% of the administration including claims and accounting. You have immediate claims override authority.  Reports are online daily, password protected. Monthly, we do a balance sheet  and income statement for your company along with a myriad of detailed/customized reports.  USWC has been vetted by AutoNation, Toyota, National City Bank, Key bank and some of the most prestigious and successful dealers in the US. We currently do business with all of the above and are 100% transparent and  willing to share any of our financial info with you the dealer and/or your representatives.

  8.  Significant cash flow  Wealth building tool  Estate planning-wealth transfer  You keep 100% of underwriting profit and investment income  Future Growth  Total Return- 25-50% more return than other available options in the dealer market  Total control of investment decisions  Total control of design including rates, coverages, marketing materials and DOWC name  Long term tax deferral due to insurance company treatment  Distributions treated as dividends

  9.  Assets outside of the dealerships which assumes the obligation of the service contract  Separate entity with no tie to dealership capital or dealers personal assets  “Crystal Ball” look forward  CLP provided by Allstate  Capital loans “no loan fees or handling charges”  Loans back to dealership to buy own floor plan  Capital improvements  Acquisitions  Rainy day fund  Investment income and underwriting profit far outpace other programs available to the automotive market USWC handles all of the day to day operations of your DOWC

  10.  Extremely lower Admin costs  No ceding fees  No premium taxes  No excise taxes  No annual maintenance fees  No loss adjustment fees  No claims fees  No segregated cell fees  No trust fees  No run-off fees  No “just because” fees  No hidden fees You the dealer will know where every dollar is every day TOTAL TRANSPARENCY

  11. TAX DEFERRAL Assumptions: 5 year service contract $2,500.00 Selling Price (Retail Premium) $1,000.00 F&I Cost $1,500.00 F&I Profit (Commission) Earnings Year 1 Year 2 Year 3 Year 4 Year 5 $500 $500 $500 $500 $500 F&I Commission Expense <$1500> <$1425> <$925> <$425> <$275> Taxable <$925> <$425> $75 *$225 Admin Fee Income Taxable Expense <$125> Income Estimated Dealer Pack Expense <$300> 5 Year Claim Expense <$_______> <$_______> <$_______> <$350> (Franchise Specific) Total Expenses <$1925> <$275> $500 <$1425> * As policies layer on top of each other, DOWC normally becomes taxable in years 8-12

  12. 10 YEAR - PROFORMA ASSUMPTIONS Sample Proforma - Nissan How Many Years of Writing? 10 Capitalization Interest Rate Compounded Annually 5.00% Federal Income Tax 32.20% State Income Tax 5.30% 1 $7,027 VEHICLE SERVICE CONTRACT PRE-PAID MAINTENANCE ROAD HAZARD PROTECTION PLAN Policies Policies Policies Written Average Gross Written Written Average Gross Written Written Average Gross Written Term Annually Premium Premium Term Annually Premium Premium Term Annually Premium Premium 12 $0 12 $0 24 $0 24 $0 36 600 $1,800 $1,080,000 36 $0 36 $0 48 $0 48 $0 48 $0 60 300 $1,800 $540,000 60 $0 60 $0 72 600 $1,800 $1,080,000 84 300 $1,800 $540,000 120 $0 1,800 $1,800 $3,240,000 0 $0 0 $0 Annual Increase Contracts Written (%) Annual Increase Contracts Written (%) Annual Increase Contracts Written (%) Dealer Commission 50.00% Dealer Commission Dealer Commission Projected Loss Ratio 17.00% Projected Loss Ratio Projected Loss Ratio Administration Fee - Include Administration Fee - Include Administration Fee - Include ENTER $$ ENTER $$ ENTER $$ $125 CLI for Non-Florida CLI for Non-Florida CLI for Non-Florida OR % OR % OR % Business Business Business NOTES Loss Based on USWC Experience

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