Understanding reinsurance and profit share can turn everyday F&I contracts into a powerful wealth-building tool. On today’s episode of Training Camp, host Adam Marburger is joined by Chad Staples, president of Elevation Dealer Services, who shares practical ways dealers can take control of their back-end programs and future-proof their business.
Staples and Marburger’s friendship extends beyond their personal relationship and into a powerful business collaboration. Although they are competitors, they share similar values and operate with an abundance mindset, believing that there is enough business to sustain both of them, and they actively support each other’s growth.
Staples’ journey into retail automotive began in 2009 when his best friend, Taylor Yates from Yates Pontiac GMC, convinced him to start selling cars. Staples left retail automotive after marrying and joined Inilex, where, through numerous mergers, he became the company’s top salesperson and developed a passion for teaching and coaching. He later served as the Vice President of Sales with All Lines Dealer Services, helping scale the company and connecting the owner with a buyer before its 2022 sale. In 2023, he started Elevation Dealer Services.
Staples’s key to success is remaining humble and a student of the game. He consistently seeks to grow by picking other people’s brains, asking questions and remaining open to learning to become an expert.
"Be faithful in all the little things. Being excellent in your craft and every single detail of the transaction, building a relationship with the customer, and doing what's a win-win."
Working with clients across the nation, he sees the biggest differentiator between an average F&I performer and an outstanding one as dedication to the customer. He advises F&I professionals to be faithful in all the “little things” and to operate with a servant’s heart, always putting the customer first.
A recurring area of opportunity he observes is dealers falling short in managing their wealth back-end. Many have a surface-level understanding of reinsurance and profit sharing but don’t truly grasp it. Without clarity, dealers aren’t able to effectively manage their budgets or claim severity. He recommends working with a professional wealth manager who can generate over 10% returns instead of the average 4.5%. He also advises dealers to evaluate reserves quarterly to fine-tune the business’s standard operating procedures.
Even if a dealer doesn’t own a reinsurance company, Staples highly recommends participating in profit sharing with their warranty provider. Ultimately, someone is keeping the money, and dealers who understand these programs can build long-term wealth. For those looking to start a reinsurance program, Staples recommends beginning with an annual premium contract of around $250,000. This amount equates to roughly 35 to 40 monthly contracts and is manageable even for smaller stores.
Staples says it’s important to reflect on how far the industry has come. The pandemic strained dealer-customer relationships as many dealers added markups, focusing on short-term gains instead of long-term impact. Dealers must reconsider their approaches to rebuild genuine relationships with customers.
For long-term success, dealers must also focus on their F&I departments. While new and used-vehicle profitability has been volatile over the last decade, F&I profits for publicly traded groups nationally have continued to grow rapidly.
