A dealer owned warranty company (D.O.W.C.) is a domestic warranty company owned by the dealer principal, with day-to-day operations handled by your provider.

 

The owner(s) control the program branding and select which F&I products are offered in their stores. The dealer has total visibility into all investments and transactions. A DOWC is taxed as an insurance company under federal tax laws, leading to significant tax efficiencies.

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• Dealer reserves, consumer contract coverages, and marketing materials, as well as the company name, and state of incorporation are some of the options managed by DOWC ownership.
   

• A DOWC program offers tax deferral advantages of a non-controlled foreign corporation (NCFC) and the cash flow benefits of a controlled foreign corporation (CFC) 
   

• Underwriting profits and investment income are retained solely by the dealer owned warranty company.
   

• With less restrictive investment allocations than traditional dealer participation programs, a Protective DOWC program offers the potential of a significantly higher risk-adjusted return on equity and assets.
   

• Flexibility to receive current income or long-term capital appreciation.
   

• The dealer is not the contractual obligor of service contracts.