Dealers see rise in F&I profit per vehicle
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Seventy-five percent of car dealers responding to a survey late last year said they expected their gross F&I profit per vehicle to rise in the fourth quarter.
In the poll of public and private new-vehicle retailers by KeyBanc Capital Markets in December, three-quarters of respondents said they expected their gross F&I profit per vehicle to increase by more than $50 in the fourth quarter. KeyBanc would not say how many retailers were surveyed.
The "financing environment remains favorable and a continued driver of sales growth," wrote Brett Hoselton, auto industry analyst for Cleveland-based KeyCorp, in a note to investors on Jan. 22, which included the survey results.
Most of the six large publicly traded dealership groups are expected to report fourth-quarter financial results next month.
The survey, launched in 2012, asks new-car dealers about the state of their business. Each month, respondents are asked what they expect their current quarterly results will be compared with the same quarter the year before.
In December, 75 percent of respondents said they expected their fourth-quarter gross F&I profit per vehicle would increase by more than $50; 25 percent said results would be relatively flat.
F&I results aren't available for privately held stores. But in the fourth quarter of 2011, the six large public groups had a combined average of $1,102 per vehicle, based on company earnings reports.
Said Hoselton: "We also anticipate an increase in total revenue in the F&I segment, driven by higher gross profit per unit, higher new- and used-vehicle sales, and higher approval rates particularly in the subprime segment."
You can reach Jim Henry at autonews@crain.com.
