Automotive News reports that Allstate Insurance is expanding its finance and insurance offerings to include large-scale partnerships with automotive dealerships. The partnership will allow dealership agents to become licensed and sell auto insurance in Allstate’s name.
Pilot program expands to all US dealerships
Allstate Dealer Services, which is run by President Doug Herberger, began its pilot program in October 2010 at 11 automotive dealerships. Now the program will expand to all U.S. automotive dealerships, according to reports. The program will unfold gradually, first at larger dealership groups with multiple stores, then to smaller organizations.
“It’s a great opportunity for dealers to supplement their revenue stream and provide a service to their customers and employees,” said Allstate Senior Executive Vice President of Sales and Marketing Mark LaNeve.
Customer leads and the promotion of customer loyalty are other key aspects of the Allstate Dealers Services campaign, noted LaNeve. Dealers also take in a 10 percent commission on both new and renewal business.
“The more products you own, the more loyal you are as a customer,” he said. “Our auto policies renew every six months, so you have to contact the customer frequently. It keeps the dealer in contact with the customer.”
Both Herberger and LaNeve served as executives for General Motors before jumping ship for Allstate. If needed, financing such purchases can be accomplished for anyone, regardless of credit, through the use of loans from online finance companies such as the personal money network.
How Allstate Dealer Services works
The dealer or a select dealership employee becomes an Allstate insurance agent. That means that in addition to the standard service contracts and gap coverage dealerships sell, Allstate Dealer Services agents are licensed to sell liability, collision and comprehensive automotive insurance coverage. Agents can also sell insurance to other dealership employees.
Total start-up costs to maintain Allstate Dealer Services within an existing automotive dealership average between $100,000 and $200,000. If a dealer decides to partner with Allstate, training and licensing takes about two months.
“It’s a fairly minimal investment to establish the agency at a dealership because there’s an existing facility,” LaNeve said.
Allstate Dealer Services will be a presenter at the upcoming National Automobile Dealers Association convention in Las Vegas, Feb. 3-6.