The D.A.C.

To fully develop the earnings, tax, and investment opportunities available to large volume dealers, we suggest incorporating and setting up a D.A.C, or Dealer Administration Company. These are domestic companies, in full control of the dealer, whose service contract products are being sold in their own stores, as well as other dealerships across the country.

 
 
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Why is it different?

  • No ceding fees

  • No premium or excise taxes (2% - 5% savings per VSC, off the top)

  • No corporate tax on investment income for 15 - 20 years (average of seven years in a DOWC)

  • Dramatically better investment income (when compared to retros, reinsurance (CFC’s / NCFC’s), DOWC’s, OEM reward programs, etc.)

  • Better tax treatment on distributed funds

  • Ability to borrow from the unearned reserves

  • 100% reserve requirements (reinsurance structures range between 102% and 120%)

  • No trust fees

  • No shared risk

To begin a discussion of how a DAC can benefit you and your dealership(s), please contact us today.