Group 1 joined AutoNation in surpassing the $2,000 mark for same-store average F&I profit per vehicle in the second quarter, while Sonic’s franchised dealers have drawn within $16 of that threshold.
Group 1 Automotive Inc. said July 29 that gross F&I profit per unit rose $250 to $2,125, a 13.4 percent increase. The Houston-based company ranks fourth on Automotive News‘ list of the top 150 U.S. dealership groups based on 2020 new-car sales.
AutoNation Inc. said its F&I departments averaged a record $2,342 in same-store gross profit per vehicle in the second quarter. The additional $167 on each average unit sold represented an 8 percent increase over 2020 and a 21 percent increase over the pre-pandemic second quarter of 2019, AutoNation said July 19. AutoNation ranks first on the Automotive News top 150 list.
“The increase in finance and insurance gross profit [per vehicle retailed] was primarily due to higher realized margins on vehicle service contracts, including our AutoNation Vehicle Protection Plan product, and an increase in product penetration,” AutoNation wrote in a July 21 filing. “Finance and insurance gross profit [per vehicle retailed] also benefited from increases in gross profit per transaction associated with arranging customer financing and amounts financed per transaction.”
AutoNation CEO Mike Jackson said on a July 19 earnings call he saw “no reason” why F&I profits won’t continue to climb.
“It’s not that we’re raising prices on F&I,” he said. “It’s that the adoption rate of our products is going up and up.”
The Fort Lauderdale, Fla.-based company continued to improve its products and their value, as well as employees’ skill in presenting them to consumers, Jackson said.
Sonic Automotive Inc. reported same-store franchise F&I gross profit per vehicle rose 14.9 percent, or $258, in the second quarter to $1,984. It said those gains were “primarily due to an increase in gross profit per contract and an increase in the other aftermarket contract penetration rate.”
Sonic, based in Charlotte, N.C., also said July 29 that it broke the $2,000 mark and set a record overall F&I gross profit per vehicle of $2,110 when all franchised dealer results are included. This represented a 14.7 percent gain from the second quarter of 2020 and a 33.5 percent increase from 2019, the company said.
Sonic said it expected to grow F&I revenue, including with more products sold on each vehicle. The company ranks seventh on the 2020 Automotive News Top 150 dealer list.
“We believe that our proprietary software applications, playbook processes and guest-centric selling approach enable us to optimize F&I gross profit and [products per vehicle] across our F&I product lines,” Sonic wrote in a quarterly filing. “We believe that we will continue to increase revenue in this area as we refine our processes, train our associates and continue to sell a high volume of retail new and used vehicles at our stores.”
Two other public groups were less than $200 from the $2,000 mark.
Asbury Automotive Group Inc. on July 27 reported same-store F&I gross profit per unit of $1,898, up 9.2 percent, or $160. The Duluth, Ga.-based company ranks sixth on the Automotive News top 150 list.
Lithia Motors Inc. said July 21 it grew same-store profit per vehicle $219 to $1,818, a 13.7 percent increase. It said in a July 28 filing the gain was “primarily due to an increase in service contract revenue per unit.”
Lithia COO Chris Holzshu told a July 21 earnings call that the $1,818 represented a $360 increase from 2019’s tally.
“While we are pleased with this progress, we acknowledge that F&I remains an area of opportunity to expand additional product offerings,” he said.
Penske Automotive Group Inc., in July 28 global results, reported an increase in same-store profit per vehicle of 20.6 percent, or $274, to $1,604. The Bloomfield Hills, Mich.-based chain ranks second on the Automotive News top 150 list.
“We believe the increase in same-store finance-and-insurance revenue per unit is primarily due to our efforts to increase finance-and-insurance penetration, which include implementing interactive digital customer sales platforms, additional training, and targeting underperforming locations — coupled with the increase in average selling prices,” the company wrote in a July 29 filing.