Office in a Car Dealership

[JCK818]

Not too bad djs. I've been able to cross sell the clients i have gotten through them. So far the retention rate is above 90%. Hopefully it stays like that.

 

[djs]

90% retention for car dealer business is awesome! This sounds like a good deal for you.

These deals don't always work out this well. Glad it did for you.

Dan

 

[JCK818]

Thank you man. I'm actually thinking about doing it in a local supermarket (ethnic). Like instore banking, but this would be an instore insurance office. Any thoughts?

 

[djs]

So, buying a car is a good trigger point for a conversation about insurance. On the other hand, buying a sack of potatoes probably doesn't compel someone to think insurance.

I guess I don't see the connection in a grocery store, outside of a bunch of foot traffic. Could you work something out so if they get a quote, you give them a coupon for $10 off of their groceries on an order of over $100 (limit 1 per household)? Of course, you would have to work with the store manager to get the coupons.....

Maybe.

Not sure it would be overly successful though.

Now, if you also provided DMV car registration services in the grocery store, then you might have something. Not sure the DMV would approve this though, but its an interesting thought.

Dan

 

[Gulliver]

See if you can charge a fee like a previous poster stated and use it as your basis for sharing. The dealer charges fees for everything why not you. This could protect some of the uncertainty of the split with the dealer. You will know quickly if it works or not.

Gulliver.

 

[Joshpowell]

The cut is to high!

My experience working with car dealerships has been good and bad! the good is that they do send alot of referrals my way. The bad most of those referrals have a reason for not having insurance or having ridiculous rates. Its usually due to SR-22 filing, tons of tickets and/or accidents. So the rate is trhough the roof. But every now and than you get a good one. If you offer the car dealership binders so they can sell on the spot instead of waiting you put yourself in a bind yourself. I've learned to go for high end private dealerships.

 

[JCK818]

This is a high end private dealership.

 

[Bertolinoins]

Thank you man. I'm actually thinking about doing it in a local supermarket (ethnic). Like instore banking, but this would be an instore insurance office. Any thoughts?

It would probably work well as several ethnic groups like to do business face to face and often in cash. If you have the right carriers and processes in place it could be very successful. I have a friend that owns a small agency that caters to the Hispanic community, their clients are very loyal and they refer all of their friends and family.

 

[wjw0006]

There are 2 problems you'll run into in this deal. If you can survive both of these, you'll do well. I will add that 50% is a bit steep, but it really isn't that unrealistic, unless its 50% for all eternity.

Problem 1: Lapses. Oh yeah, you'll get them. They needed insurance to drive the car off the lot, but many won't think they need it after the first payment is due. Fortunately, the bank will tell them otherwise (unless they are cash deals) and they will come back, at least a percentage of them. Make sure your 50% adjusts for actual income, not initial income.

Problem 2: Loss ratios. I assume these are used car deals, not new car. You'll write a lot of state minimum (or close to it) deals just to get it done. You'll be amazed at how many stolen cars / total losses you get around the 3rd or 4th month.

I used to write a LOT of this kind of business, unfortunately, the car dealers I was working with went out of business in 2008/2009 with the economy problems.

Problem 3: You'll work Friday and Saturday nights!!!!

Now, to answer your question.... you will probably have an 80% close ratio on the clients he sends you. It should not be any lower than that, if he is only sending those who need insurance. If he sends everyone, including those with insurance, your ratio will go down.

Find out how many cars a month he sells (80-90 is extremely high, but possible). Most used car lots I have dealth with are probably in the 20-40 range, with a lot of variances.

You'll need to make sure you can deal with drivers with 'impaired' driving records.

I had the same type of offer from a mortgage company once. They claimed they were doing at least 100 refi's a month and could get me the homeowners business. They wanted a 50% cut. They were unimpressed when they found out how little that was and wanted 50% of everything I wrote with that client for the life of the client. That was to much for me. They were out of business within 2 months.

Dan

I could not have said it better. Also, you may run into the ethical dilemma of selling the customer low policy limits so their new car payment and insurance month payment fit the budget that the car dealer promised them.....

 

[ins4u2]

Well its been nearly a year, any updates for us?