Even at the most efficient and profitable auto dealerships, there is one problem that sticks out like a sore thumb: insurance.

More often than not, the sales process is interrupted while the customer looks for insurance. Dealers and OEMs have long dreamed of eliminating this eternal pain point. Now, thanks to new technology, there is a solution.

Embedded auto insurance integrates directly into a dealer’s line of products and services. So instead of looking for insurance on their own, customers can purchase A-rated insurance right at your dealership.

Unlike policies from legacy insurers, embedded insurance uses information already provided as part of the sales process and then, with the help of AI and algorithms, is further populated with detailed data about a customer’s motor vehicle history, driving record, household members, other cars, etc. The result is an auto policy custom-tailored for the purchasers, be they a young couple just starting out or established citizens with businesses and much to protect. Better still, some embedded insurance providers can provide a quote in 30 seconds or less.

The appeal of embedded insurance is obvious. It’s fast, efficient and provides great value. According to Deloitte’s 2025 Auto Consumer Study, 46% of Americans would consider buying auto insurance from an OEM/dealer. And, according to a recent JD Power study, most customers believe that embedded auto insurance would be equal to or better than legacy insurance.

Benefits for Dealers

There are plenty of benefits for the consumer, but even more benefits for dealers when they integrate insurance into their dealership’s ecosystem.

Competitive advantage: Making your customer’s experience easier and more pleasant is a reason for them to keep coming back.

Helps close deals: Embedded insurance offers seamless, integrated solutions to meet customer demand for digital convenience and transparency.

Improves customer retention: You see customers every three years for a new car and twice a year for regular maintenance. Insurance renews twice a year. That means two additional touchpoints where you can delight the customer.

Builds trust: Models and AI make sure the customer is getting the right insurance for the best price. Customers don’t have to worry about it. That builds trust.

Higher conversion rates: Providing embedded insurance during the sales process captures customers when they are motivated. Removing friction can boost overall sales.

Offers customers better options: Insurance has soared in recent years to where the costs of coverage have moved from a secondary consideration to top four or five. Embedded insurance platforms can offer personalized quotes based on special customer needs and preferences.

Better information for customers: When the insurance premium is included in the sales process, buyers get a better understanding of the total cost of ownership. Researching rates from legacy insurers is time-consuming and repetitive. If coverage is more than expected, customers might have to pare back on options or even start all over. But if the premium is lower than expected, they may be able to upgrade. For customers to compare quotes themselves online could take hours, even days.

Enhanced customer loyalty: When you solve problems and make life easier for the customer, you become more than someone they buy cars from. Customers appreciate that.

Additional revenue streams: Embedded insurance complements other products like extended warranties, protection packages, options, cross sells, etc.

Speeds the sales process: The typical car-buying process takes 2.5 hours. Most of that is filling out forms, waiting and customers shopping for insurance. Digitally literate customers have little patience for that. Embedded auto policies can be generated near instantly. Customers drive off the lot, and you go on to the next deal.

Efficient claims handling: If they have a claim, the customer comes to you. Some embedded insurers even guarantee OEM replacement parts and collision repairs at your dealership.

DMS systems: Most, but not all, are already incorporated into the major deal management systems.

Inevitable Future

Embedded insurance is the future. Deloitte estimates that in just five years, at least 20% of auto insurance will be purchased via embedded insurance at OEMs and dealers. Many others predict the pace will be much faster. Savvy dealers have been working for years to integrate the entire sales process — financing, software updates, service contracts, safety options, etc. Now, finally, embedded insurance will complete the circle.