I used to believe that dealerships simply accepted a 1-to-1 relationship between new-vehicle sales and F&I sales. But times being what they are, that doesn't appear to be true anymore.
Case in point: J.D. Power and Associates says the percentage of service contract penetration remains pretty steady while new-vehicle sales fluctuate.
The good news is that service contract penetration didn't fall when the economy tanked. But it didn't go up, either. And that's disconcerting, given that forecasters say it's going to take years before U.S. auto sales get back to16 million-plus.
So how are dealerships planning to replace that lost income?
In their first-quarter earnings reports, Penske Automotive and Asbury Automotive offered some hints. They sketched out ways they're trying to make more F&I and parts and service dollars per customer, such as ratcheting up F&I training and pitching service contracts to service customers.
Looks like the Great Recession just might change the way F&I is sold.