14 • July 2025 • Powersports Business

and amortization to Section 163( j) business interest limitations addbacks to adjusted taxable income, cost segregation studies become even more beneficial for dealership groups that own their real estate facilities.

• Cost segregations for dealerships can significantly benefit due to many favorable tax provisions that allow for several portions of the facility that can be allocated as specialty trade assets which qualify for bonus depreciation and / or Section 179. Dealerships investing in property improvements or new facilities will benefit by discussing with CPAs or other tax professionals experienced with dealership industry real estate tax matters to maximize tax savings. Preferably, these discussions should start before real estate is purchased. In some cases, the business tax and ownership structure can be relevant to the deductibility of the cost segregation.

• It is also possible to do a cost segregation on a building placed in service in prior years, but in a look-back situation, the depreciation rules revert to the rules in place in the year that real estate was originally placed in service.

CONCLUSION As highlighted earlier in our article, powersports dealers are encouraged to adopt a year-round tax and financial planning approach that extends beyond the tax filing deadline. Should you like to learn more on how we help dealer principles, or if you have additional questions, contact us!

Brad Stanek( brad. stanek @ ms. com), is an executive director and financial advisor with The StanekHaack Group at Morgan Stanley in Chicago, and Paulina Matel( paulina. matel @ ms. com), is a financial advisor with The Stanek-Haack Group.

If you’ ve felt like insurance has become harder to manage lately, you’ re not imagining things. The powersports insurance market is tightening— and fast.

If it feels like ZACHARY MATERNE I say this every time, it’ s because I do. Things keep tightening, and unfortunately, this isn’ t just a temporary phase. The good news is that dealers who stay ahead of these challenges by being prepared still have options. But waiting until renewal— or worse, until something goes wrong— isn’ t a winning strategy.

Another major market— one that has historically insured Harley-Davidson dealerships exclusively— will begin non-renewing those accounts starting July 1, 2025. This comes on the heels of their 2023 exit from the broader Powersports space. With this shift, one of the last remaining dedicated options for Harley- Davidson dealers is closing its doors.

Even more concerning: No new markets are stepping in to replace them. The remaining garage carriers are overwhelmed with submissions and becoming far more selective. If you’ re a smaller dealership, deal in ATVs, side-by-sides, or have watercraft exposure, you’ re likely already feeling it.

That’ s why it’ s never been more important to work with a broker who understands the operations of a powersports dealership— and has relationships with the underwriters making these decisions. In this environment, you need someone who can advocate for you, explain your business, and make sure your submission gets a fair look.

A big part of the disconnect is that most garage insurance programs were built around automotive dealerships— businesses with less risky driving exposure, fewer customer interactions, and minimal off-site activity. That model doesn’ t reflect how we operate in powersports.

We build community through demo rides, events, group rides, and brand engagement well beyond the showroom. That’ s good business— but it also brings added exposure that many underwriters don’ t want to take on without serious controls in place.

Let’ s start with test rides, which are under heavy scrutiny. If you haven’ t reviewed your procedures lately, now is the time.

Underwriters are looking for:

• Signed demo waivers

• Proof of customer insurance

• Full riding gear

• An understanding of the customer’ s riding ability

• A designated route that avoids high-risk elements like left turns

• And most importantly: test rides led by a dealership employee

These are no longer just recommendations. Failing to meet these standards can result in denied coverage and claims— or worse, mid-term cancellation if uncovered during a policy audit. If your process isn’ t documented, consistent, and followed, you’ re putting your coverage at risk.

Now let’ s talk about events. Bike nights, poker runs, off-site shows and customer appreciation days are essential to what we do— but increasingly, policies are excluding coverage for any activity outside of“ normal business operations.”

That may even include on-site events unless they’ re approved in advance or covered under a separate policy.

This isn’ t about being reckless. It’ s about operating in a system that wasn’ t built for

See Materne, Page 15