Tricolor Launches New, Affordable Auto Insurance
for Low Income, Credit Invisible Consumers
August 12, 2019
BY MATTHEW MEEK
Tricolor, ONE OF THE nation’s largest used vehicle retailer's focusing on the sale and financing of vehicles to the Hispanic consumer, today unveiled a groundbreaking new affordable auto insurance option for low-income and credit invisible customers through its affiliate company Tricolor Insurance. After testing the product earlier this year, Tricolor will begin rolling out the new insurance offering throughout all of its markets in Texas and California.
“Car owners with limited incomes or credit histories are often forced to pay double the auto insurance rates of comparable coverage for mainstream credit consumers,” said Daniel Chu, CEO of Tricolor. “We are committed to providing our customers with a trusted, high quality and affordable car buying and ownership experience that extends from the moment they step into our dealership through vehicle ownership. Auto insurance is a critical part of that, and we are thrilled to offer a new lower cost alternative for deserving customers.”
The nonstandard auto insurance industry comprises approximately 30% of the $140 billion personal auto insurance market. It is highly fragmented with roughly 25,000 nonstandard agents across the country yet concentrated geographically, with Texas, California and Florida accounting for 52 percent of all direct premiums in 2017, according to A.M. Best.
Insurance agencies serving this customer segment often offset perceived cancellation risk by charging high origination fees. Tricolor eliminates these excessive agency fees – including point of sale, endorsement, and cancellation fees – using risk insights gained from its data-driven underwriting models.
“Pricing transparency is a significant component of delivering a compelling value proposition,” added Mauricio Delgado, Chief Product and Strategy Officer at Tricolor. “We are leveraging the insights gained from providing affordable, high quality vehicles and financing to underserved Hispanics to provide a lower cost alternative auto insurance option. Unlike agencies which must support high customer acquisition costs, our dealerships provide a robust lead generation channel, allowing us to deploy a lower cost model. Tricolor is uniquely positioned to draw on its brand, lead generation strategies, technology platform and back office capacity to scale this initiative as part of our broader financial services platform.”
Tricolor Insurance Agency, an affiliate of Tricolor Auto Group, currently serves as an agent for ten nonstandard carriers and markets its services throughout Tricolor’s 28 dealerships in Texas and, beginning in 2019, through its 8 Ganas dealerships in southern California. Currently available only to Tricolor auto purchase customers, the company plans to extend its insurance offering to all vehicle owners later next year.
Since its founding in 2007, Tricolor empowers its customers by providing access to affordable financing on high quality, certified vehicles in order to enhance the quality of their lives and ultimately help them to build a better future. On a combined basis, Tricolor and Ganas have served nearly 50,000 customers and disbursed nearly $1 billion in affordable auto loans by using its proprietary model to segment risk.
For more information about Tricolor and Ganas, please visit tricolor.com and ganas.com.
Tricolor is a mission-driven company which sells and finances high quality, certified used motor vehicles through its premium brands, Tricolor Auto Group in Texas and Ganas Auto Group in California, utilizing advanced data analytics and technology to advance financial inclusion to a highly underserved market and offer responsible, affordable, credit-building auto loans to individuals with no or limited credit history.
Headquartered in Dallas, Tricolor and its affiliate Ganas Auto Group operate 36 retail dealerships across 12 markets in Texas and California, as well as a shared services center in Guadalajara, Mexico.