While DOWC believes that the Dealer Owned Warranty Company is the ultimate evolution of dealer participation, that doesn’t mean it’s all we offer. There’s no one-size-fits-all solution when it comes to building your wealth while reducing tax liability. As participation experts, we’re committed to educating the industry and guiding dealerships through complexities of choosing the right structure to meet their needs.
By carefully assessing your business and other important factors, DOWC can help you determine the most suitable structure to help you build your wealth. We offer the following structures to take your dealership to the next level:
- DOWC®
- Reinsurance
- DOWCReTM
- Dealer Obligor
- Profit Share
- Guaranteed Profit Share
Participation Structures
- DOWC®: The Industry-Leading Structure
- A DOWC is a domestic C-corporation that serves as the provider of F&I products. As the provider, it receives premium and is responsible for payment of consumer claims made under the F&I products. The DOWC is considered an insurance company for federal tax purposes, but not regulatory purposes. Still, it must satisfy all state and lender requirements, including licensing and the establishment of financial security, where applicable.
- Reinsurance: Balancing Risk and Reward
- Reinsurance is ideal for well-established dealers ready to explore participation more deeply. It enables participation in insurance profits and investment income, without the dealer establishing a provider, striking a balance between risk and potential rewards so long as premium does not exceed a certain amount.
- DOWCReTM: Innovative, Tailored Solution
- DOWCRe is a unique program that combines the benefits that our DOWC and Reinsurance structures are known for. Dealers mitigate risk and regulatory concerns through a reinsurance structure while benefiting from the generation of a net operating loss, like a DOWC.
- Dealer Obligor: Control and Flexibility
- A Dealer Obligor program takes on risks through contractual obligations. They are not regulated as insurance companies by the states in which they operate. As a result, they do not have to file forms or rates with the state, but do retain contingent liability. This gives them greater flexibility in the products they offer to consumers.
- Profit Share: Opportunity with Reduced Risk
- A Profit Share is a lower-risk program where dealers can participate in the underwriting and investment income generated by underwriting performance of contracts sold on a retrospective basis.
- Guaranteed Profit Share: Profit Participation Without the Risk
- Tailored for those who are risk-averse or new to participation, this program enables dealers to participate in underwriting profits without facing any repercussions. It provides a low-risk entry into participation, allowing dealers to reap the benefits of upfront disbursements based upon anticipated underwriting performance.
We are committed to delivering cutting-edge products and services that are meticulously tailored to meet the unique needs of your organization. We offer advanced tools and technology designed to be a critical asset in enhancing dealer revenue and fostering sustained, increasing success. With a comprehensive assessment of your business and essential factors, DOWC can recommend the most effective structure to enhance your wealth. Schedule a meeting today and find out which structure will satisfy your needs.
