Office in a Car Dealership

[JCK818]

This is an upscale car dealership. 99% of his cars are above 30k in value. If i get a charge back, I don't eat that. We share the loss, just like the profits. Please don't lecture me about ethics. I'm sure I'm not the first guy in this forum who is working with a dealer and the dealer is going to make money. Let's just say, I will pay him a monthly rent for the office I will have there.
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I have personally done this but first thing's first...

IT IS ILLEGAL TO SHARE COMMISSIONS WITH SOMEONE WHO IS NOT LICENSED TO SELL INSURANCE.

Now, even if you were going to move forward...

The only reason someone would generally ask you to do this for them is in a buy-here/pay-here dealership. DON'T DO IT. #1 The lapse ratio is ridiculous. #2 His offer makes no sense. He wants you to sit in his dealership but wants 50% of your money? Aren't you doing HIM a favor? AND...#3 If you do give him 50%, what happens when the policy cancels, are you going to bill him for the portion of the commission he did not earn?? (Again remembering that it's illegal to share your commission with him and you could be stripped of your license if you do.)

Also, if this is a buy-here/pay-here place, the types of clients you'll be working with will more than likely drive you crazy. Sure, sometimes bad things happen to good people but in general, they are irresponsible as he!! They will cancel for NP and forever be asking you to reinstate them. Not only that, (at least in my experience), they are so under-educated that you can barely get them to understand you, let alone their insurance policy. Oh, and you better get plenty of waivers around because the ONE coverage they swear they don't need (b/c they're too cheap to pay for it), they'll complain up a storm that they asked for it and you just never put it on the policy.

I could really go on and on about the negatives. In a nutshell I found that it was more hassle than help.

And P.S...please remember that that guy is SERIOUSLY trying to take advantage of you (convincing you to do what he wants is his job - he's a CAR salesman)!

I know about the negatives and I'm very well aware about the charge back possibility. You cannot tell me though an extra 50-60 policies a month might not be worth it. I know the 50% is a bit much, but I have no expense. Just have one of my guys sit there look pretty. I'm also thinking if you give this clients good service and good prices, they might even bring in other stuff later on. AM I dreaming?

 

[b61mack]

how much are you going to pay,to have someone sit there. i don't think it is a bad idea, but i just think 50% is to much. just my opinion.

 

[djs]

Actually, if it's higher end cars, its a different ballgame all together.

Realistically, if the cars are over $30K in value, then odds are the majority of clients have insurance already. Some may have liability only and will need something to drive off the lot, but most will have coverage that will extend to the car.

This is a good news, bad news situation, depends on what you want. He'll still refer them to you, but your closing percentage will be much lower. When you do close, you'll probably get multiple cars and potentially homes. Much better client overall.

Several of the referals will probably end up being a quick conversation that night and then a followup to actually close.

Dan

 

[Hopwood04]

My 2 cents. I think you are missing the big picture here. Many of these individuals are going to be of the age 30 - 45 with families. Build yourself a database and market them for a tax-free retirement. Sell the P&C on an everyday basis, but also market life insurance. Look into some indexed life products and watch some of these webinars about tax-free retirement. There is one more strategy that is called Infinite banking. Basically it is using a whole life contract that has a 0% loan feature and the idea is when an individual goes out to buy car or a large ticket item, they use the cash value of their contract to finance the loan instead of borrowing from the bank. I understand some dealership will offer a 0% loan anyways and it wouldn't make sense to borrow your own money when you can borrow someone elses for free. My point is that you are being provided with an unlimited source of leads that you can market other products to not just P&C. I say take the deal!

 

[Bertolinoins]

You have little to lose by giving it a shot. You will know within 90-130 days if it is working or not and then you can make a business decision on the value of the relationship. You have to try different things. If you try 10 marketing ideas you will have two home runs, two duds and 6 ideas that don't really go anywhere. They key is trying different things so you can hit a few home runs and limiting your risk on the duds. Since you invest little upfront and can walk away if it is not working... the worst thing that can happen is that you waste your nights and weekends for 90-120 days. I am sure we have all done worse. Go for it... you can't make a shot if you never take one.

 

[VaDwayne]

I need you opinions please.

I have an offer to set up shop at a local dealership. No cost on my end ( just the pc i'm going to use). He wants 50% of what i make. He guarantees to send about 80-90 clients my way a month. My issue is, it sounds too good to be true. I'm thinking I close 50%?
Currently he refers it out and according to him majority of them do get insurance.
Anyone have experience in doing business in a dealership? Anything i'm missing here? Any idea what the closing rate might be or the cancellation ratio?

Speaking from experience, and I spent over 20 years in the car business, you are only going to get the "get me done business", which is a polite way of saying "trash". People with good credit scores, and good incomes, and are not upside down in their trade-in already have their priorities in order already. You are going to be the guy they call on Saturday and Sunday,or at nightime, because the customer couldn't reach their current agent. Guess what, you bind coverage for them and then their current agent get's their business.

You will get people who need full coverage on their vehicle to drive it off of the lot, only to shop you after they leave for a better deal. You will get SR22 and FR44 people who would sign up with anyone who could get them insured.

AND, the owner and manger of said dealership couldn't care less about youand you insurance gig. They want to move cars off of the lot anyway they can, and if that means screwing you, so be it.

Also, people that have good credit, good incomes, good job history, and can get their money for a whole lot less at their local credit union, want to be in and out of the dealership as quickly as possible and they are not going to want to spend another 30 minutes with an insurance agent, to be sold "one more product" after they've heard about extended warranties. life and disablity insurance, gap insurance, "rust and dust". etc. PEOPLE HATE CAR DEALERS AND CAR DEALERSHIPS, for the most part.

 

[djs]

AND, the owner and manger of said dealership couldn't care less about youand you insurance gig. They want to move cars off of the lot anyway they can, and if that means screwing you, so be it.

This part for me wouldn't be so much of a negative, though it is reality. As long as you understand that this is their frame of mind, you just learn to deal with it.

The other part that is missing is yes they want the person to drive off the lot with the car, they (more importantly) want the loan to go through. Insurance is a key piece of that. Never, ever, ever mess up a dealer loan due to insurance stuff. Never cause a loan payout to be delayed by a day, you'll get tossed out on your ears.

Dan

 

[HomeService]

I thought I wanted to be in the car insurance biz, I quickly learned I was wrong. Well, not so quick. It took like six months.

 

[VolAgent]

I thought I wanted to be in the car insurance biz, I quickly learned I was wrong. Well, not so quick. It took like six months.

Quick learner I see.

 

[DiegoInsGuy]

Our agency went to the "Tent Sales" here at the stadium in San Diego when 15-20 dealers would come in from around the county and sell.
We would be fortunate to do between 7-10 sales per day on a 3 day weekend. We got out real fast. Not saying it's not worth it. But if your gonna make it you might have to charge a bit more than your normal $50 broker fee.