Two of the nation’s biggest publicly traded dealership groups said early, small-scale results from their nontraditional dealerships -- either stand-alone used-vehicle stores or ones that use techniques such as no-haggle pricing -- showed below average F&I revenue per vehicle retailed.
“Our F&I PVRs are not as high as the F&I PVRs we see in our core stores, but they are good,” Craig Monaghan, CEO of Asbury Automotive Group, said about Asbury’s stand-alone used-car stores during a conference call Tuesday.
Asbury, of Duluth, Ga., reported overall average F&I revenue per vehicle of $1,365 for the first quarter on a same-store basis, up about 3 percent from the same quarter a year ago. The company did not break out results for its different retail channels.
Asbury uses the brand name Q auto for its stand-alone used-vehicle stores. The group launched the concept a year ago. Today, Asbury has three Q auto locations, all in Florida.
Asbury trade-offs
“It’s a very different format,” Monaghan said. “It is a fixed-price format. The cars are fixed price. The F&I products are fixed price. It’s a selling process that runs off of an iPad. There is not a traditional F&I office. So it’s an environment where we would expect to potentially see lower front-end grosses -- but we also have a lower cost structure.”
Monaghan said that so far, the company is satisfied with the results: “I would say it’s working. We are still learning, but we are very happy with the direction that it’s going.”
Asbury ranks No. 7 on the Automotive News list of the top 150 dealership groups based in the U.S., with retail sales of 91,560 new vehicles in 2014.
Separately, Sonic Automotive Inc., of Charlotte, N.C., said its average F&I revenue per vehicle on a same-store basis rose 4 percent in the first quarter from a year earlier to $1,260.
Sonic averages
Sonic calls its stand-alone used-vehicle stores EchoPark. Sonic launched the concept in August and now has three locations in the Denver area.
Jeff Dyke, executive vice president of operations, told Automotive News in an email that EchoPark stores are running just over $1,000 per vehicle retailed in F&I. He said that was better than Sonic’s forecast of $850.
Overall, Dyke said, Sonic is pleased with EchoPark’s results. “This is something we’ve been working on the past seven years,” Dyke said during a conference call Tuesday. “This is no experiment. We are rolling forward. We are meeting or beating our expectations.”
Sonic is No. 5 on the Automotive News top dealerships list, with retail sales of 135,932 new vehicles in 2014.
The group also is rolling out what it calls One Sonic-One Experience for all its stores, starting with the home Charlotte market. That initiative aims to complete the sales process within 45 minutes by having one associate use technology to work with a customer through the entire process, including F&I.
Dyke said those stores that have implemented One Sonic-One Experience had average F&I revenues per vehicle of about $1,060. He said that was about $100 per vehicle higher than the same stores had before they adopted One Sonic-One Experience but lower than the Sonic average overall.
On average, he said, “Sonic is higher but also includes a very high mix of high-line stores, which we have none in the [One Sonic-One Experience] group of stores.”
AutoNation milestone
Meanwhile, today AutoNation Inc. reported average F&I revenue per vehicle retailed of $1,515 in the first quarter, up 8 percent from a year ago and a company high.
It was the first time AutoNation broke $1,500 per vehicle and just the second time any of the publicly traded new-car groups did it. Group 1 Automotive, of Houston, was first at $1,521 in the fourth quarter of 2014. Group 1 is expected to report its first-quarter 2015 results on April 28.
AutoNation, of Fort Lauderdale, Fla., tops Automotive News’ list of the largest dealership groups, with retail sales of 318,008 new vehicles in 2014.
Also today, Lithia Motors Inc. reported average F&I revenue per vehicle retailed of $1,233 in the first quarter, up 4 percent from the year-ago period.
Lithia, of Medford, Ore., ranks No. 8 on the Automotive News list with retail sales of 91,192 new vehicles last year.
Rounding out the list of the six large public new-car retailers, Penske Automotive Group Inc. is expected to report first quarter results April 28.
