Key to AutoNation's F&I might: 'Better execution'
AutoNation, the biggest U.S. auto dealership group, is sticking to a strategy of selling from a short menu of F&I products, especially extended-service contracts and prepaid maintenance.
"There are no new products. What there is is better and better execution," COO Michael Maroone said in a conference call to investors on Jan. 31.
Last week the company announced record fourth-quarter F&I revenue per vehicle of $1,307, up about 7 percent from the same quarter in 2011. Average F&I revenue per vehicle was a record for the whole of 2012, too, at $1,273, up about 6 percent.
AutoNation usually has the highest F&I revenue per vehicle of the six largest publicly traded new-car retailers. Maroone said AutoNation does extensive F&I training and emphasizes F&I product sales over making money by pushing customers into higher interest rates.
Penske Automotive Group Inc. today said its gross F&I profit per vehicle edged up to $986 during the fourth quarter from $985 a year earlier. Same-store F&I revenue rose 13 percent to $75.4 million in the fourth quarter, Penske said.
For the year, Penske's gross F&I profit per vehicle slipped to $988 from $1,000 in 2011. Same-store F&I revenue rose 13 percent to $298.8 million in 2012, the company said.
The other public new-car retailers will report fourth-quarter results later this month.
In a December survey of public and private new-vehicle retailers by KeyBanc Capital Markets, 75 percent of respondents said they expected their gross F&I profit per vehicle to increase by more than $50 in the fourth-quarter compared with the 2011 quarter. KeyBanc would not say how many retailers were surveyed.
"We've led the industry, of all the people reporting publicly, for quite some time, and it's gotten a lot better, up $84 year-over-year in the quarter, just a huge increase," Maroone said.
He added: "I'm thrilled with our F&I team."
You can reach Jim Henry at email@example.com.