Saving money on costly auto dealer insurance is all about attention to detail
Running an auto dealership is fun and exciting, but you know the truth, too: being in business is expensive. Among your many business expenses —from advertising to personnel, to keeping a roof over your head—one of the most important is auto dealer insurance.
Insurance is one of those necessary evils that you tout the importance of to your customers, but cringe when it’s your turn to pay your monthly premiums or update your policies. Spending money every month on what could go wrong is a fact of owning a business with expensive inventory—so it’s time to deal with it, face the situation head-on, and learn how you can buy what you need in a cost-effective manner.
How to get the best auto dealer insurance rates
1. Be clear about your aggregate deductible
Most auto dealer insurance policies include aggregate limits, or a stipulation noting the most the insurer will pay for all covered losses during a specific period. This would be something you’d have to deal with usually only if your vehicle inventory is damaged in a hail storm, hurricane, or tornado.
Don’t sign on the dotted line without thoroughly reading your policy, though. You need to know if your deductible applies per catastrophic event on a blanket basis over all your vehicle inventory (if you own more than one dealership), or if you have to pay the deductible individually at each dealership address. Save money and try to find a policy that will only make you pay that deductible once if you own multiple dealership locations.
2. Be an organized, active participant in your auto dealer insurance
Getting the right policy and proper coverage in order can be quite an exhausting process. When you’re done, you were probably beyond relieved, filed it away in some nondescript filing cabinet, and went on with your business. Your reaction is understandable, but being an active participant in your insurance is essential if you own a dealership.
Go through your policy regularly with your agent, step-by-step, line-by-line. Make sure your premium is fair, the coverage is accurate, and know exactly what they’re using to determine your rates. And when it comes to organizing, don’t toss your insurance paperwork in a filing cabinet and forget about it.
Color-code or label files, so you won’t have trouble finding them when you need them. Scan every page they’ve given you, so you don’t only have physical copies, but readily available digital ones as well. That way, if you need to pull anything up quickly, you can find it easily on your computer. You can use the dealership’s scanner, or download an app like Snapscan or Scanner Pro that lets you create PDFs easily from your smartphone.
3. Buy Here Pay Here (BHPH) dealerships should think about collateral protection insurance
If you run a BHPH dealership, you’re used to dealing with riskier customers, in every sense of the word. You probably require your customers to carry full coverage auto insurance for the term of their loan, but BHPH customers can struggle to afford physical damage coverage and are likely to let it lapse. When that coverage lapses and damage occurs to one of your vehicles, that exposes you to a loss.
Offering your BHPH customers collateral protection insurance as an alternative to physical damage coverage (which is more expensive) will save customers money, give you another revenue stream, and prevent additional risk. Collateral protection insurance protects a vehicle held as collateral for loans by lenders and it’s a single interest insurance plan that will protect your dealership if the customers fail to insure a vehicle from physical damage.
Invest time in creating the right auto dealer insurance package for your dealership
Properly insuring your dealership isn’t something you can do on the computer in 15 minutes. Synch up with a dedicated insurance agent that will get to know you, your business, and the unique risks you face.
They should speak with you about options like general liability, auto errors and omission, property/equipment breakdown, workers’ compensation, employment practices liability, excess liability, and more. Every type of coverage won’t be right for you, but it’s up to your insurance agentProperly insuring your dealership isn’t something you can do on the computer in 15 minutes.Properly insuring your dealership isn’t something you can do on the computer in 15 minutes.to be honest, work with you, and craft a portfolio of coverage that will keep your costs and risks low.