5 signs of robust F&I

Jim Henry is a special correspondent for Automotive News

Here are five signs that dealership F&I profits will stay strong:

1. Warranty Group, a leading administrator, has had double-digit year-over-year growth in the number of service contracts sold in 2012, said marketing vice president Bob Bean.

2. Demand for extended-service contracts and other F&I products is so good that the company recently opened a new servicing center in Champaign, Ill., to supplement its headquarters operations in Chicago.

The new servicing center has about 30 positions filled, but it is built to hold as many as 200 employees, Bean said. Besides handling added demand, the new service center also is a backup for the headquarters operation in the event of a disaster.

3. Bean said the Warranty Group is increasing its "attachment rate," which means customers are buying more F&I products per unit.

4. The company is signing up more dealerships -- mostly franchised, new-vehicle dealerships, but also independent, used-car dealerships, he said.

5. Finally, for the company that does business as Resource Dealer Group and was formerly known as Pat Ryan & Associates, growth is based on steadily increasing vehicle sales.

Said Bean: "The sheer volume of cars being moved has certainly benefited all dealerships."

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