There are some phonetic similarities, but there’s a key difference between the words “insurance” and “assurance.”

It boils down to protection from what you can't necessarily control (insurance), versus an added layer of protection designed to allow greater freedom for choice in decision-making (assurance).  

And the latter is what is being offered through wholesale vehicle return guarantees provided by parties like DealShield, which announced Thursday it is now giving dealers the option to upgrade their DS360 Return Guarantee from 21 days to 30 days.  

“Dealers should have insurance for their vehicles; that’s important. We don’t insure the vehicle, but we do give them assurance that they can return the vehicle within 21, and now 30 days, if it doesn’t meet their needs,” said Brett Woods, interim vice president of assurance at DealShield parent company Cox Automotive, in a phone interview.

Stu Dressler, who is interim leader and senior director of operations at DealShield, added: “What we really do is allow them to make choices. And that’s the big difference. With insurances, you’re protecting against things you can’t make the choice on. You can’t choose whether you’re going to have a fire or a flood.

“But you can make your own choices on whether you want to keep or return a vehicle.”

Choice. That’s the crux of the return guarantee provided by DealShield and the reason behind allowing dealers an extra nine days to return wholesale purchases.

And some dealers are using this to expand their wholesale sourcing strategy, knowing they will be protected should the plan not pan out. 

How DS360 guarantee works

Through the guarantee, should a subscribing dealer buy a wholesale car at a participating auction then decide he or she does not want it — for any reason — the dealer can bring the vehicle back to any auction in the DealShield network and receive a full refund.

DealShield says there is no arbitration and no questions asked.

The original window to return the vehicle was 21 days, and that is still being offered. But if dealers wish to upgrade, they can now have 30 days to return the vehicle.

“We’re just in constant feedback mode with our dealers,” Woods said. “It’s really as simple as them asking for more time to help them support their business. At the end of the day, that’s what we’re here for: to make it easy for them and really help them grow. And we think we can do that even better with a 30-day guarantee, for some dealers.”

Dressler added: “Each dealer has a unique value proposition in the way they use the products. For example, some of them wanted a little more time to be able to check out the vehicle and see if they have any concerns about it. Some of them wanted a little more time to get it on their lot and see how they’re feeling about if from a consumer-interest perspective – there’s just any number of reasons, because there’s so many different ways that the dealers use the product for their economic benefit.”

Expanding beyond a 'niche'

In a news release announcing the extension option, Woods mentions that some dealers utilize DealShield to “take chances on riskier inventory” that could end up benefitting their stores.

That might be cars out of the typical price ranges in which a dealer buys or in different markets from where the dealer usually shops, Woods said in the phone interview.

Dressler said that from a geographical standpoint, dealers have utilized this guarantee program for a bit of added confidence in wideing their wholesale sourcing to additional markets or auctions.

And an example of a dealer broadening its horizon on the pricing side, Dressler pointed to a Florida franchised dealership that was having a lot of success in used cars, albeit within a certain “niche.” So, the store wanted to try expanding.

“And it wasn’t that they were taking on riskier vehicles, per se. It was that they were not comfortable in a lower-price segment, because it just wasn’t something they had a lot of experience with,” Dressler said.

“So they used the guarantee literally to start buying vehicles at a lower price point to attract a different buyer than what they had. And it really grew their used-car sales,” he said. “The used the guarantee to give them that confidence to grow that part of their used business and really open up a new market to them.”