F&I results rise at 3 public retailers
AutoNation Inc. set a record with average F&I revenue per vehicle retailed of $1,407 in the first quarter, an increase of 6.4 percent from the year-earlier period.
The first publicly traded new-car dealership groups to report first quarter results -- AutoNation, Sonic Automotive Inc. and Asbury Automotive Group Inc. -- all reported higher average F&I revenue per vehicle, as part of a trend toward slow but steady improvement.
AutoNation COO Michael Maroone attributed his company’s record F&I revenue per vehicle to its unglamorous approach of “continued improvement at store-level execution and long-term customer retention through value-added products.”
“We continue to be extremely pleased with our performance here,” he said during a conference call for investors last week.
Maroone has said in the past that AutoNation’s F&I mainstays are extended service contracts and prepaid maintenance. The company set its previous record for F&I revenue per vehicle retailed -- $1,381 -- in the second quarter of 2013.
Moving the needle
At Sonic, F&I revenue per vehicle rose 5.1 percent in the first quarter to $1,206. Vice Chairman David Smith said Sonic has room to improve in F&I, which it intends to do using a softer-sell approach.
“We are doing all the F&I presentations where people can buy rather than being sold something. If we can move the needle from where we are now in the $1,200 range to $1,400, $1,500 range, we multiply that across how many vehicles we sell, that’s a huge, huge opportunity for us that translates into hundreds and millions of dollar of gross,” Smith said, according to a transcript of the company’s April 22 conference call published at seekingalpha.com.
Asbury reported its first quarter F&I results today. The company averaged $1,308 per vehicle in F&I revenue, up 1.2 percent from the year-earlier period.
During the company’s conference call, COO Michael Kearney credited the increase to “disciplined execution of sales processes and training.”
Among the three public retailers that have reported first-quarter results so far, AutoNation ranks No. 1 on the Automotive News list of the top 125 dealership groups in the United States, with retail sales of 292,922 new vehicles in 2013. Sonic ranks No. 4, at 132,363, and Asbury No. 7, at 86,685.
No. 2 Penske Automotive Group Inc., No. 3 Group 1 Automotive Inc. and No. 8 Lithia Motors Inc. are all expected to report first-quarter results on April 24.
You can reach Jim Henry at email@example.com.