Multi-State B2B Vehicle Service Contracts & GAP

Business Overview:

The Company has been in business for almost 30 years. They provide vehicle service contracts and GAP insurance to new and used automobile and powersports dealerships in the U.S. The Company also provides lifetime battery contracts for motorcycles and off-road vehicles. The vehicle service contracts cover repairs or replacement to specified components of vehicles sold by the dealerships. When a service contract is sold, the Company is paid a premium, which it uses to pay for any claims that arise during the contract period. Claims management services have been effectively managed by an outside contractor for over five years. Based upon prior claims history, the owners are including in the sale, a cash reserve which can be utilized for future claims made on policies whose contract periods extend beyond the Closing Date.

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Property Features and Assets:

The Business is currently home-based.

Market Competition and Expansion:

Some specific competitors for this company are GWC and RPM1. These companies are much larger in terms of size but struggle with the expediency of service and response time due to their sheer size and complexity. Most of them offer their services to most states in the country. The Company is known for their excellent service levels and responsiveness to questions or concerns raised by their network of dealers. As the average age of vehicles increase and auto manufacturing warranties expire, consumers are more likely to purchase auto extended warranties or vehicle service contracts. According to an IBISWorld Industry Report, the revenue within the industry is poised for growth as per capita disposable income and new car sales are expected to gradually increase over the next five years. In addition to the current services offered, The Company could increase revenue by expanding the list of states they do business in, by offering warranties on other products such as golf carts, eighteen wheelers, RVs, and boats. They could offer tire and wheel coverage as well.

Reason for Selling:

Retirement.

Additional Details:

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