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F&I Dealer Participation Programs

In addition to our ancillary product offerings, Sonsio wants to help you grow your dealership’s revenue potential through our dealer participation programs.

Profit participation is a critical part of how you can generate incremental income from F&I, capitalizing on the underwriting of the products you sell.

Retrospective (Retro) Profit Sharing Program

Sonsio’s Retro Profit Sharing Program allows you to participate in the underwriting profit from the Sonsio F&I products produced through your dealership(s).

The Sonsio Retrospective Profit Sharing Program has no risk of loss to the participating dealer. Sonsio holds all reserve funds and pays the annual earned underwriting profit each year as the premium from the underlying contracts is earned.

Benefits of Sonsio's Retro Profit Share Program:

  • All products are administered by Sonsio and insured by an AM Best A-rated carrier
  • Allows for participation in all underwriting profit produced (earned premium, less incurred claims and administrative fees)
  • The participating dealer has no downside risk of loss
  • Sonsio provides quarterly experience reports on all Retrospective Profit Sharing Program business
  • Dealer is only taxed when annual distributions are paid

Reinsurance Program

Sonsio’s Reinsurance Program allows you to participate in 100% of the underwriting profit produced by your vehicle service contract business, as well as all the investment income earned on the reserve funds ceded to your reinsurance company trust account.

While this does have some downside risk, it has proven to be a successful option for dealers who have the patience and ability to wait for contract reserves to earn out the five to ten year terms of the underlying contracts reinsured.

Benefits of Sonsio's Reinsurance Program:

  • All products are administered by Sonsio and insured by an AM Best A-rated carrier
  • Does NOT charge a ceding fee
  • Dealer owns the reinsurance company and participates in all of the investment earnings on business reinsured
  • Dealer decides when to take distributions
  • May be entitled to beneficial tax treatment
  • Shareholders in the Program are only taxed when taxable distributions are taken and may be entitled to long-term capital gains tax rates on distributions

For more detailed information, see the Reinsurance Structure Options Supported by Sonsio below.

We want to help you find the best solution for your dealership to help maximize your profits on the F&I products you sell!

To Enroll in one of Sonsio's Participation Programs, speak with your Account Manager or call 1.866.608.9836

More Detailed Information:
Reinsurance Structure Options Supported by Sonsio

There are two choices for dealers who participate in a reinsured program:

Option #1 – Sonsio uses the dealer’s existing reinsurance company.

Option #2 – Dealer creates a new reinsurance company.

In both scenarios, the premium will reside in a separate trust account provided by Sonsio, and the funds cannot be commingled with any other reinsurance products' funds. The account will be in the name of Sonsio and will be for the benefit of the dealer's reinsurance company.

From independents to large automotive groups, Sonsio will work to develop a reinsurance model to best fit your objectives.

3 Reinsurance Models to Consider:

Controlled Foreign Company (CFC)

This is for the dealer that is looking for long-term investment and tax deferral.

  • Maximum of $2.65 million for 2023 in written reserves in one year to receive benefit.
  • Reinsurance company may be eligible to base its federal income tax on net investment income only (IRC Section 831) at a corporate tax rate of 21%.
  • May be involved in more than one CFC but ownership structure must be different.

Non-Controlled Foreign Company (NCFC)

This option is not as common. It may be a solution for dealer with multiple franchises likely to write more than $2.4 million in reserves in one year.

With an NCFC, the dealer purchases shares in an existing offshore reinsurance company (with other dealers) to participate in the earned underwriting results related to investment income generated through affiliated stores participating in the program.

Dealer Owned Warranty Company (DOWC)

This option works for dealers who are very large and not in need of up-front cash.

A DOWC is formed as a C-corporation in the state of the producing dealership. The DOWC is the obligor. The program is administered by a third party with insurance policies backing it.

  • DOWC requires capital investment.
  • Relaxed investment restrictions.
  • Unique accounting and tax advantages.
  • Subject to state tax.

If you are looking to manage more of the risk of your F&I products and take on more of the accounting inside of a C-corporation, there are some benefits to this type of a structure for your F&I products.


To Enroll in one of Sonsio's Participation Programs, speak with your Account Manager or call 1.866.608.9836

Connect with Sonsio Vehicle Protection at industry events

Visit Sonsio at NADA 2023 at booth #2442

Click here to request a meeting with our sales team to learn more about our products and programs, and let’s explore ways Sonsio Vehicle Protection can help you build long-term success and profits!