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Going Big Time

Warrantech’s top executive opens up about the 28-year-old company’s recent acquisition, its redesigned product line and more.

May 2011, F&I and Showroom - Feature

by Gregory Arroyo - Also by this author

The first 16 months of Dominic Sansone’s career at Warrantech were marked by uncertainty. The last eight months, however, have been filled with anything but for the president of the Bedford, Texas-based company’s automotive division.

Last September, a majority interest of Warrantech, which was founded in 1983, was acquired by New York-based AmTrust Financial Services, a multinational property and casualty insurer that acts as its own administrator, claims its own insurance company and is publicly traded on the NASDAQ. Sansone, whose 35 years in the industry includes a 17-year stint as a dealer, talked about what the acquisition means to his business unit and its competitors.

F&I: Can you talk about the difference between your new owner and the private equity firm that purchased you in 2007?

Sansone: Well, H.I.G. Capital specializes in buying companies, so their interest in us was different than AmTrust’s. AmTrust has been in this business and views Warrantech as a way to expand its footprint, so it’s a perfect marriage. It’s also one of the few companies where the insurer and administrator are vertically integrated, and that security is priceless.

F&I: Sounds like you’ll be going after the Warranty Groups and CNAs of the world.

Sansone: That’s the strategy. And in a lot of areas, I think we’ve surpassed them. We have products no one has, and we’re doing some things that will really put us ahead. We created a new division that focuses solely on providing training and income development to our dealers and agents. It’s headed up by Michael Burgholzer. So far, he’s revised and enhanced several areas of our business. He’s also big on technology, and AmTrust is committed to supporting his plans.

F&I: What new technology are you bringing to market?

Sansone: Right now we have a Web-based training and reporting tool. We’re also looking at an iPad tool that will allow sales managers to track where their salespeople are in the process. It’ll also track performance. All of this is part of the services and tools our dealer customers will have access to when they sign up with us. And what we’ll do is go in and perform a complete analysis of their dealership and develop a plan for income development.

F&I: Did having your own insurance company help Warrantech become Volvo’s factory-authorized, OEM service contract administrator?

Sansone: We just finished our first month of business with Volvo and we’re very excited about that relationship. We’re talking to other OEMs, so this is a space we’re looking to grow in. The fact that we have our own insurance company has really given us credibility in those conversations.

F&I: Can you talk about your month-to-month service-contract offering? I’ve received some questions about that product recently.

Sansone: There are products out there that claim to be month-to-month programs, but they’re really just 5-year, 100,000-mile programs, divided up. What we offer is a true month-to-month product that automatically renews on a monthly basis until not renewed or the customer stops making payments. We have two levels of coverage: Vehicles with less than 65,000 miles get exclusionary coverage, which expires when a vehicle is either five years from inception or reaches 100,000 miles. We also have enhanced powertrain coverage, which covers main components for up to 125,000 miles from the time of purchase and for as long as the customer continues to pay.

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