F&I’s contribution to dealership gross profits continues to grow, despite a slight decrease in new-vehicle sales penetration for extended-service contracts, statistics released last week show.
F&I accounted for 38.8 percent of gross profit for dealership new- and used-car departments combined in 2013, up from 36.9 percent in 2012, according to “NADA DATA 2014,” the latest annual U.S. dealership financial profile from the National Automobile Dealers Association.
That was the fourth yearly increase in a row. It was also part of a gradual increase that has lasted nearly all of the past decade. The year 2009 was an exception, when contributions from F&I dipped during the recession.
NADA broke down the total F&I number into income from finance, such as dealer reserve and flat fees for arranging loans and leases, and income from “service contract and other” F&I products.
Finance-related sales accounted for 22.8 percent of new- and used-car gross profit in 2013, up from 21.3 percent in 2012. Sales from service contracts and other products accounted for 16 percent, up from 15.6 percent.