Protective Asset Protection, a provider of F&I programs, services, and dealer-owned warranty company programs, announced today it has made available a new educational infographic for automotive dealerships and dealer principals on the effect recent tax reform measures have had on dealer participation programs.
In “Tax Laws Demand a Review of Reinsurance Programs,” analysts note the Trump administration’s Tax Cuts and Jobs Act, which took effect for the 2018 tax year, may reduce personal and corporate liability, but it also affects the selection and performance of a dealer’s participation program, such as non-controlled foreign corporations.
According to a recent survey conducted by Protective Asset Protection, more than half of the dealer groups surveyed currently participate in an NCFC, and only 11% of dealer group executives are aware that the new tax law could adversely affect NCFCs.
“While NCFCs may have served dealership principals in the past, it may not be a wise move to take a gamble on this structure moving forward,” said Matt Gibson, vice president of reinsurance for Protective Asset Protection. “Dealers are gambling that the advisors’ advice will be accepted by the IRS. There’s a lot at risk when rolling the dice with the Internal Revenue Code and the IRS’s interpretation of it.”
The infographic also explains how a dealer-owned warranty company may be a better alternative for dealers. DOWCs are structured to allow a dealer to own, market, sell, and support their own branded F&I program by owning their own company.
Click here to download the free infographic.
ABOUT PROTECTIVE ASSET PROTECTION
Protective Asset Protection provides vehicle protection plans, GAP, and credit insurance through vehicle dealerships. Protective Asset Protection has been serving dealers for more than 55 years and currently provides products and services to automobile, marine, RV and powersports dealers. Protective Asset Protection is part of the financial services holding company, Protective Life Corporation. For more information about Protective Asset Protection call 800-323-5771, or visit www.ProtectiveAssetProtection.com.
ABOUT PROTECTIVE LIFE CORPORATION
Protective Life Corporation provides financial services through the production, distribution and administration of insurance and investment products throughout the U.S. The flagship subsidiary, Protective Life Insurance Company, was founded in 1907. Protective’s home office is located in Birmingham, Alabama. As of September 30, 2018, Protective Life Corporation had consolidated assets of approximately $91.8 billion. Protective Life Corporation is a wholly owned subsidiary of Dai-ichi Life Holdings, Inc. (TSE:8750). For more information about Protective, please visit www.Protective.com.