Product & Technology
Summit Updates
New Infographic Makes Case for Reinsurance Review
March 19, 2019 • by ADT Staff
CHESTERFIELD, Mo. — Protective Asset Protection, a provider of F&I programs, services, and dealer-owned warranty company programs, announced today it has made available a new educational infographic for automotive dealerships and dealer principals on the effect recent tax reform measures have had on dealer participation programs.
In "Tax Laws Demand a Review of Reinsurance Programs," analysts note the Trump administration's Tax Cuts and Jobs Act, which took effect for the 2018 tax year, may reduce personal and corporate liability, but it also affects the selection and performance of a dealer's participation program, such as non-controlled foreign corporations.
According to a recent survey conducted by Protective Asset Protection, more than half of the dealer groups surveyed currently participate in an NCFC, and only 11% of dealer group executives are aware that the new tax law could adversely affect NCFCs.
"While NCFCs may have served dealership principals in the past, it may not be a wise move to take a gamble on this structure moving forward," said Matt Gibson, vice president of reinsurance for Protective Asset Protection. "Dealers are gambling that the advisors' advice will be accepted by the IRS. There's a lot at risk when rolling the dice with the Internal Revenue Code and the IRS's interpretation of it."
The infographic also explains how a dealer-owned warranty company may be a better alternative for dealers. DOWCs are structured to allow a dealer to own, market, sell, and support their own branded F&I program by owning their own company.
Click here to download the free infographic.
Originally posted on Auto Dealer Today
NADA Predicts 1.2% Decline in 2020 New Car Sales
The National Automobile Dealers Association estimates U.S. new vehicle sales will fall to 16.8 million units as internal and external forces reshape the auto retail industry.
AE Review
AE eMagazine
AE F&I Success Blog
More From the World of F&I and Dealer Operations
F&I Magazine
© 2020 Agent Entrepreneur. All Rights Reserved.