Second-quarter F&I gross profit per unit rose at all six publicly traded U.S. new-car dealership groups, largely driven by strong product penetration, the companies said during their earnings calls today and last week.
Group 1 Automotive had the highest average F&I gross profit per vehicle retailed the quarter at $1,682 on a same-store basis, up 4.9 percent, or $78, year over year. F&I product penetration on used vehicles during the quarter, especially for extended service contracts and maintenance, made up for lower transaction prices on used units, CEO Earl Hesterberg said. The Houston dealership group's finance penetration fell slightly, he said.
"I think we're still pretty steady," Hesterberg said. "We've been saying for a long time, we don't think we can grow penetration much higher and we keep making ourselves out to be liars. But this business still seems very stable to us. And a lot of lenders still are competing very aggressively for our business."
AutoNation Inc., , of Fort Lauderdale, Fla., closely followed Group 1 with F&I profit per unit of 1,664, a 4.3 percent, or $68, increase from the year-earlier quarter. Customer acceptance of AutoNation-branded F&I products drove the F&I profit per vehicle boost, CEO Mike Jackson told Automotive News.
At Asbury Automotive Group, of Duluth, Ga., F&I profit per unit jumped 6 percent to $1,522. CEO Craig Monaghan said on the company's conference call last week that only one-third of the company's F&I profit per unit is finance reserve. The majority of F&I profit, he said, is driven by sales of ancillary products. "We have a great F&I team and trainers, and with that we think we've benefited through ... products sales," he said.