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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 Share

A Retrospective or “retro” program allows your dealership to participate in a portion of the underwriting profits associated with your business that exceed a threshold as business earns out.

A retrospective commission allows this without the risk associated with reinsurance. As the Administrator, Sonsio will hold the reserves and pay you a share of the remainder of the reserves based upon performance levels. You participate only in the profit.

Benefits of a Retro Profit Share Program:

  • Potential for additional profit with little or no added risk
  • Dealer receives a quarterly activity statement
  • Profit distribution is paid annually, a year in arrears
  • Sonsio provides performance and underwriting benefits
  • Dealer does not need to form or have an existing Reinsurance Company
  • Sonsio is the Obligor and holds the risk


Owning a Reinsurance Company allows you to keep a greater share of the profits produced by your vehicle service contract business. With Reinsurance, a sizable portion of the premium is placed into your Reinsurance Company with underwriting profit, as well as investment income potential and additional tax savings and tax deferment.

While this presents a bit more risk, it has proven to be a successful option for dealers who have the patience and ability to wait for the reserves to earn over 5-10 years.

Benefits of a Reinsurance Program:

  • Dealer can control funds immediately
  • Dealer decides how to use the cash
  • Dealer is responsible for any future claims liability
  • Sonsio acts as the Administrator
  • Immediate tax consequences
  • Tax due on cash flow, not on profits

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

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 the Administrator, and the funds cannot be commingled with any other reinsurance products' funds. The account will be in the name of the Administrator 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 $2.4 million in written reserves in one year to receive benefit.
  • Taxed as ordinary income on underwriting and capital gains on investment income.
  • 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