How TPAs Improve Profitability and Compliance in Auto Dealerships

Published on September 11, 2025 | Michael Kalamitsiotis

Introduction: Profitability Meets Compliance

Dealerships are under constant pressure to grow Finance & Insurance (F&I) profits while avoiding costly compliance missteps. Balancing these priorities internally is challenging. That’s why more dealers are turning to Third-Party Administrators (TPAs).

Companies like Pessada Holdings provide the expertise, systems, and oversight needed to optimize F&I product performance and ensure compliance with state and federal regulations.

This article explores how TPAs help dealers unlock greater profitability while minimizing compliance risk, and why ignoring them leaves dealerships exposed.

How TPAs Drive Profitability

1. Better F&I Product Management

TPAs such as Pessada Holdings give dealers access to:

Market-driven product portfolios that align with consumer demand
Training and performance tracking for F&I managers
Data-backed insights to improve product penetration rates

2. Reducing Overhead Costs

Instead of hiring more in-house staff, TPAs manage:

Claims administration
Contract compliance
Reporting and analysis

This allows dealership staff to focus on sales and customer relationships, not administrative tasks.

3. Customer Loyalty and Retention

Well-managed F&I programs often include service contracts and loyalty incentives. By outsourcing to TPAs, dealers gain:

Increased service retention
Higher long-term customer satisfaction
Repeat vehicle sales opportunities

How TPAs Protect Compliance

1. Staying Ahead of Regulations

Federal and state regulations in automotive finance change frequently. TPAs like Pessada Holdings monitor these changes and help dealerships:

Avoid non-compliance penalties
Train F&I managers on proper disclosures
Provide audit-ready documentation

The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) frequently issue updated guidance, making ongoing oversight critical.

2. Reducing Liability Exposure

Common risks like improper contract handling or incomplete disclosures can lead to chargebacks and lawsuits. A TPA mitigates these risks by ensuring:

Consistent documentation
Standardized contract processes
Reduced exposure to disputes

3. Building Trust with Customers

Today’s buyers expect clarity in financing. TPAs improve trust by:

Ensuring transparency in product presentation
Simplifying paperwork and disclosures
Creating a more consistent buying experience

Case Example: Profitability and Compliance in Action

A dealership group that is now partnered with Pessada Holdings after priorly facing recurring chargebacks with a different TPA. Pessada Holdings helped the dealership group and within one year, they achieved:

A 15% increase in F&I product sales
Zero compliance penalties thanks to standardized processes
Higher CSI (Customer Satisfaction Index) scores due to better transparency

This shows how a TPA relationship strengthens both profitability and compliance performance.

Choosing the Right TPA Partner

When selecting a partner, dealerships should evaluate:

Experience and proven success in automotive F&I
Technology capabilities such as dashboards, compliance alerts, and DMS integration
Training and ongoing dealer support
Ability to scale with multi-rooftop groups and growing operations

Pessada Holdings exemplifies this type of strategic partnership, combining compliance oversight with profitability-driven solutions.

Summary

For modern dealerships, partnering with a TPA is no longer just an efficiency play, it’s a competitive necessity. With rising compliance pressures and tighter margins, dealers need TPAs like Pessada Holdings to protect long-term profitability and maintain compliance. Dealerships looking for deeper insights can explore the Pessada Holdings Education Center, which provides resources on F&I best practices, compliance trends, and maximizing TPA partnerships.