Publics lift F&I profit per unit on strong ancillary sales
Skip to main content
Sister Publication Links
  • Automotive News Canada
  • Automotive News Europe
  • Automotive News China
  • Automobilwoche
AN-LOGO-BLUE
Subscribe
  • Subscribe
  • Account
  • login
  • HOME
  • NEWS
    • Dealers
    • Automakers & Suppliers
    • News by Brand
    • Cars & Concepts
    • Coronavirus Coverage
    • China
    • Shift
    • Mobility Report
    • Special Reports
    • Digital Edition Archive
    • This Week's Issue
    • VW badges rtrs web.jpg
      VW Group operating profit drops by half in 2020
      Washington Auto Show postponed amid ongoing COVID-19 pandemic
      Subaru expands Feeding America donation, advertising
      Mass. dealership group to pay $1 million in unemployment scheme settlement
    • Audi to build EVs at new company majority owned by VW Group
      European Chamber rules out American, European export curbs as cause of chip shortage
      Used-vehicle market posts first contraction in 2020
      Tight chip supplies could persist for as long as a decade
    • Detroit Aerial Panorama during sunset
      Developing future workers to fuel growth in mobility
      Getting around in Las Vegas often involves long waits for a crowded monorail ride, below, or taking escalators up and down to cross elevated pedestrian walkways along the Strip.
      Las Vegas offers best and worst in transportation challenges
      Where is transportation headed?
      In pandemic environment, RV industry ‘roaring back'
    • Crashes involving electric vehicles, such as that of a Tesla Model X in California in 2018, pose battery-fire concerns for first responders.
      NTSB says automakers need to better arm emergency responders
      An EVgo electric vehicle charging station
      Charging network EVgo near merger to go public, report says
      The Cruise AV autonomous vehicle, based on the Chevy Bolt
      Honda taps GM's Cruise to bring new mobility to Japan
      Aurora teams with PACCAR on self-driving truck development
    • Elon Musk interview
      Tesla’s Model Y, on sale since March, is a showcase of EV technologies competitors will benchmark.
      Technologies of Electrification
      Cadillac’s Lyriq EV will be unveiled Aug. 6.
      Future Product Pipeline
      A CALL TO ACTION
    • Biden redirects course on emissions standards
      Carlos Tavares and Stellantis
      Who’s who at Stellantis
      Greg Kelly, left, an American former representative director of Nissan, is on trial in Japan in the case involving Carlos Ghosn’s compensation package.
      Inside the messy problem called Ghosn's ‘haircut'
      GM, Unifor go from strife to ‘right solutions’
    • Access F&I
    • Fixed Ops Journal
    • Marketing
    • Used Cars
    • Retail Technology
    • Sales
    • Best Practices
    • Dealership Buy/Sell
    • NADA
    • NADA Show
    • Automakers
    • Manufacturing
    • Suppliers
    • Regulations & Safety
    • Executives
    • Talk From The Top
    • Leading Women Network
    • Guide to Economic Development
    • PACE Awards
    • Management Briefing Seminars
    • World Congress
    • Aston Martin
    • BMW
      • Mini
      • Rolls-Royce
    • Daimler
      • Mercedes Benz
      • Smart
    • Fiat Chrysler
      • Alfa Romeo
      • Chrysler
      • Dodge
      • Ferrari
      • Fiat
      • Jeep
      • Maserati
      • Ram
    • Ford
      • Lincoln
    • General Motors
      • Buick
      • Cadillac
      • Chevrolet
      • GMC
      • Holden
    • Honda
      • Acura
    • Hyundai
      • Genesis
      • Kia
    • Mazda
    • McLaren
    • Mitsubishi
    • Nissan
      • Infiniti
    • PSA
      • Citroen
      • Opel
      • Peugeot
    • Renault
    • Subaru
    • Suzuki
    • Tata
      • Jaguar
      • Land Rover
    • Tesla
    • Toyota
      • Lexus
    • Volkswagen
      • Audi
      • Bentley
      • Bugatti
      • Lamborghini
      • Porsche
      • Seat
      • Skoda
    • Volvo
    • (Discontinued Brands)
    • Virtual reveals (Sponsored)
      • GENESIS: 2021 GV80
      • KIA: 2021 K5
      • LEXUS: 2021 IS
      • NISSAN: 2021 Rogue
      • TOYOTA: 2021 Venza and 2021 Sienna
    • Auto Shows
      • Detroit Auto Show
      • New York Auto Show
      • Los Angeles Auto Show
      • Chicago Auto Show
      • Geneva Auto Show
      • Paris Auto Show
      • Frankfurt Auto Show
      • Toronto Auto Show
      • Tokyo Auto Show
      • Shanghai Auto Show
      • Beijing Auto Show
    • Future Product Pipeline
    • Photo Galleries
    • Car Cutaways
    • Design
  • OPINION
    • Blogs
    • Cartoons
    • Keith Crain
    • Automotive Views with Jason Stein
    • Columnists
    • China Commentary
    • Editorials
    • Letters to the Editor
    • Send us a Letter
    • Nikon turns lens on auto factory, build quality
      Bosch_information_domain_computer web.jpg
      Bosch, Continental battle to supply the brain of the connected car
      A victory lap for Detroit car design
      Stellantis_logo_blue_background web.jpg
      In 'merger of equals,' PSA is buying FCA, Stellantis prospectus says
    • view gallery
      1 photos
      A New GM
      view gallery
      1 photos
      The Bridge
      view gallery
      12 photos
      Leo Michael's best of 2020
      view gallery
      1 photos
      UAW Deal
    • Shifting gears away from the stick shift
      SEMA still a wonderful circus
      Penske still has plenty of races to win
      Ford's turn in the hot seat
    • January 19, 2021 | Small car part causes big problem
      January 12, 2021 | Automotive industry shined in 2020
      December 8, 2020 | In a year that lacked luster, All-Stars showed how to shine
      November 24, 2020 | Female talent in automotive is expanding
    • Dan Shine
      Don't totally ‘forget about 2020'
      Jamie Butters
      Big auto show era truly over
      John Possumato
      Missing piece to the mobility puzzle: Helping carless people
      Dave Versical
      Female CMO is new norm
    • How Tesla, GM transformed EV market in 2020
      Is sales recovery nearing an end?
      Beijing's uphill battle to boost EV sales
      Nasdaq-like Star Board poised to become key finance platform
    • EV charging
      Time for U.S. to embrace the EV
      Ford's ‘Finish Strong' ad sets right tone for '21
      UAW settlement brings justice, voting rights
      Dealers should be treated as partners in EVs
    • Is banning ICEs in our best interests?
      GM should share EV risk with dealers
      Ready to buy Mirai, but where to fuel?
      From Toyota store to hydrogen highway
  • DATA CENTER
  • VIDEO
    • AutoNews Now
    • First Shift
    • Special Video Reports
    • Weekend Drive
    • AutoNews Now: Tavares to have 38 direct reports at Stellantis
      AutoNews Now: VW to take 'radical, new approach' with flagship electric sedan
      AutoNews Now: Biden to revisit fuel efficiency rules
      AutoNews Now: Tavares: Stellantis needs to be 'great rather than big'
    • First Shift: Ford prices Takata recall at $610M
      First Shift: Honda to test Cruise AV in Japan
      First Shift: Trump pardons former Google self-driving engineer Levandowski
      First Shift: GM's surprise path to building electric delivery vans in Canada
    • N.J. dealer helps position peers for ‘electric revolution’
      DCH Millburn Audi
      'Finding the diamond in the rough': How 2020's No. 1 dealership retains talent
      Don Johnson Motors
      'Distinctive culture' cuts turnover, carves career paths at Wis. dealership group
      Why 2020 could be a record year for buy-sells
    • Why the pickup is the auto industry's 'battleground'
      Carlos Ghosn's quest to restore his reputation
      Why Ford must execute to avoid 'deep trouble'
      Why Honda is 'locked and loaded' for 2020
  • EVENTS & AWARDS
    • Events
    • Awards
    • Congress Conversations
    • Retail Forum: NADA
    • Canada Congress
    • Europe Congress Conversations
    • Leading Women Conference
    • Fixed Ops Journal Forum
    • ANE Shift
    • Shift: Mobility at a Crossroads
    • Shift: The Future of Mobility (CES)
    • 100 Leading Women
    • 40 Under 40 Retail
    • All-Stars
    • Best Dealerships To Work For
    • PACE Program
    • Rising Stars
    • Europe Rising Stars
  • JOBS
  • AN Solutions
  • +MORE
    • Leading Women Network
    • Podcasts
    • Webinars
    • In the Driver's Seat
    • Publishing Partners
    • Classifieds
    • Companies on the Move
    • People on the Move
    • Newsletters
    • Contact Us
    • Media Kit
    • RSS Feeds
    • Shift: A Podcast About Mobility
    • Special Reports Podcasts
    • Daily Drive Podcasts
    • AAM
    • Gentex
    • Reputation.com
    • Ricardo
    • Ricardo
    • Allstate: Want more from your F&I?
    • Ally: Navigating the future of automotive retailing
    • Amazon Web Services: Any place, any time, any channel
    • Amazon Web Services: The power of the cloud
    • Amazon Web Services: Universal translator: Harnessing sensor data to build better automotive software
    • Epic Games: Transforming the auto industry with digital assets
    • FTI Consulting: Crisis as a catalyst for change
    • Google: 5 trends shaping the auto industry's approach to a new normal
    • IHS Markit: Automotive loyalty in the wake of the COVID-19 recession
    • IHS Markit: Autonomous vehicles: Automotive and transportation disruption
    • IHS Markit: COVID-19: The future mobility delusion
    • IHS Markit: The battery electric vehicle (BEV)
    • Level5: 2020 Automotive E-Commerce Report
    • Naked Lime: Bring social reputation together as part of big-picture marketing
    • Wells Fargo Auto: Switching gears from LIBOR to SOFR
    • Ally: Do It Right
    • DealerSocket
    • Deloitte: Cyber everywhere: Preparing for automotive safety in the face of cyber threats
    • Facebook: The road to a zero-friction future
    • Guide To Economic Development
    • PayPal Credit: How consumer financing helps drive sales for online auto parts retailers
MENU
Breadcrumb
  1. Home
  2. ACCESS F&I
August 02, 2017 01:00 AM

Publics lift F&I profit per unit on strong ancillary sales

Hannah Lutz
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Lithia's Holzshu: “Our key is [to] continue to focus on making sure we have the right products for the right customers.”

    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.

    Dyke: EchoPark leads the charge.

    Closer to goals

    F&I profit per unit at Sonic Automotive Inc., of Charlotte, N.C., inched up 2.4 percent to $1,374 in the second quarter. Jeff Dyke, executive vice president of operations, said Sonic has an internal goal this year of $1,400 per unit in average F&I gross profit. Considering rivals Group 1 and AutoNation are in the $1,600 range, Dyke said, Sonic could eventually go higher than this year's target. "We think that number can be $1,500," he said, adding that F&I performance varies by brand and geography. "But we certainly think there's plenty of upside from an F&I perspective."

    Same-store F&I profit per vehicle at Lithia Motors, of Medford, Ore., jumped 6.4 percent to $1,352 in the second quarter. On a consolidated basis, Lithia's average F&I profit per unit was $1,298. For the 128 stores it acquired before December 2014, average F&I gross profit was $1,314, compared with $948 for the 32 stores Lithia acquired after December 2014. The company's goal is an overall average of $1,450 in F&I per unit, according to its earnings presentation.

    Product mix key

    Lithia arranged financing on more than 75 percent of units sold, the presentation said. The dealership group sold service contracts on 45 percent of sales and lifetime oil contracts on 26 percent, CFO John North said during the company's earnings call last week.

    For some products, extended service contracts, for example, used-vehicle sales have a higher penetration than new-unit sales, said Lithia Executive Vice President Chris Holzshu. Forty-eight percent of used vehicles were sold with a service contract, compared with 41 percent of new-vehicle sales, he said.

    "Our key is [to] continue to focus on making sure we have the right products for the right customers," Holzshu said. "You have certified customers, you have core customers, and you have value customers. And what we're trying to do is make sure we have the right products that we can attach to each one of those customers based on where they're at in the buying cycle."

    Penske Automotive Group, headquartered in Bloomfield Hills, Mich., near Detroit, increased F&I profit per unit 5.31 percent to $1,150.

    Jamie LaReau and Jim Henry contributed to this report.

    RECOMMENDED FOR YOU
    Subprime car buyers skipping loan payments, lender says
    Letter
    to the
    Editor

     

     

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Subprime car buyers skipping loan payments, lender says
    Subprime car buyers skipping loan payments, lender says
    Wells Fargo hires Scott Powell as COO
    Wells Fargo hires Scott Powell as COO
    New U.S. consumer watchdog chief lays out goals
    New U.S. consumer watchdog chief lays out goals
    Sponsored Content: Toyota Indiana leadership go behind the scenes of manufacturing the all-new 2021 Sienna
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    See more newsletter options at autonews.com/newsletters.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Digital Edition
    Automotive News 1-18-21
    THIS WEEK'S EDITION
    See our archive
    Fixed Ops Journal
    Fixed Ops Journal 12-14-20
    Read the issue
    See our archive
    FINANCE & INSURANCE REPORT: Sign up to get news, ideas and commentary delivered each Wednesday afternoon on how to maximize profits from your F&I products and services.
    FIRST SHIFT WITH JENNIFER VUONG: Sign up for our morning newscast and get the news you need to start your day in a quick 4-minute video.
    Get Free Newsletters

    Sign up and get the best of Automotive News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    Subscribe Now
    Connect With Us
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter

    Our mission

    The Automotive News mission is to be the primary source of industry news, data and understanding for the industry's decision-makers interested in North America.

    AN-LOGO-BLUE
    Contact Us

    1155 Gratiot Avenue
    Detroit, Michigan
    48207-2997

    (877) 812-1584

    Email us

    Automotive News
    ISSN 0005-1551 (print)
    ISSN 1557-7686 (online)

    Fixed Ops Journal
    ISSN 2576-1064 (print)
    ISSN 2576-1072 (online)

    Resources
    • About us
    • Contact Us
    • Media Kit
    • Subscribe
    • Manage your account
    • Reprints
    • Ad Choices Ad Choices
    • Sitemap
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • HOME
    • NEWS
      • Dealers
        • Access F&I
        • Fixed Ops Journal
        • Marketing
        • Used Cars
        • Retail Technology
        • Sales
        • Best Practices
        • Dealership Buy/Sell
        • NADA
        • NADA Show
      • Automakers & Suppliers
        • Automakers
        • Manufacturing
        • Suppliers
        • Regulations & Safety
        • Executives
        • Talk From The Top
        • Leading Women Network
        • Guide to Economic Development
        • PACE Awards
        • Management Briefing Seminars
        • World Congress
      • News by Brand
        • Aston Martin
        • BMW
          • Mini
          • Rolls-Royce
        • Daimler
          • Mercedes Benz
          • Smart
        • Fiat Chrysler
          • Alfa Romeo
          • Chrysler
          • Dodge
          • Ferrari
          • Fiat
          • Jeep
          • Maserati
          • Ram
        • Ford
          • Lincoln
        • General Motors
          • Buick
          • Cadillac
          • Chevrolet
          • GMC
          • Holden
        • Honda
          • Acura
        • Hyundai
          • Genesis
          • Kia
        • Mazda
        • McLaren
        • Mitsubishi
        • Nissan
          • Infiniti
        • PSA
          • Citroen
          • Opel
          • Peugeot
        • Renault
        • Subaru
        • Suzuki
        • Tata
          • Jaguar
          • Land Rover
        • Tesla
        • Toyota
          • Lexus
        • Volkswagen
          • Audi
          • Bentley
          • Bugatti
          • Lamborghini
          • Porsche
          • Seat
          • Skoda
        • Volvo
        • (Discontinued Brands)
      • Cars & Concepts
        • Virtual reveals (Sponsored)
          • GENESIS: 2021 GV80
          • KIA: 2021 K5
          • LEXUS: 2021 IS
          • NISSAN: 2021 Rogue
          • TOYOTA: 2021 Venza and 2021 Sienna
        • Auto Shows
          • Detroit Auto Show
          • New York Auto Show
          • Los Angeles Auto Show
          • Chicago Auto Show
          • Geneva Auto Show
          • Paris Auto Show
          • Frankfurt Auto Show
          • Toronto Auto Show
          • Tokyo Auto Show
          • Shanghai Auto Show
          • Beijing Auto Show
        • Future Product Pipeline
        • Photo Galleries
        • Car Cutaways
        • Design
      • Coronavirus Coverage
      • China
      • Shift
      • Mobility Report
      • Special Reports
      • Digital Edition Archive
      • This Week's Issue
    • OPINION
      • Blogs
      • Cartoons
      • Keith Crain
      • Automotive Views with Jason Stein
      • Columnists
      • China Commentary
      • Editorials
      • Letters to the Editor
      • Send us a Letter
    • DATA CENTER
    • VIDEO
      • AutoNews Now
      • First Shift
      • Special Video Reports
      • Weekend Drive
    • EVENTS & AWARDS
      • Events
        • Congress Conversations
        • Retail Forum: NADA
        • Canada Congress
        • Europe Congress Conversations
        • Leading Women Conference
        • Fixed Ops Journal Forum
        • ANE Shift
        • Shift: Mobility at a Crossroads
        • Shift: The Future of Mobility (CES)
      • Awards
        • 100 Leading Women
        • 40 Under 40 Retail
        • All-Stars
        • Best Dealerships To Work For
        • PACE Program
        • Rising Stars
        • Europe Rising Stars
    • JOBS
    • AN Solutions
    • +MORE
      • Leading Women Network
      • Podcasts
        • Shift: A Podcast About Mobility
        • Special Reports Podcasts
        • Daily Drive Podcasts
      • Webinars
      • In the Driver's Seat
        • AAM
        • Gentex
        • Reputation.com
        • Ricardo
        • Ricardo
      • Publishing Partners
        • Allstate: Want more from your F&I?
        • Ally: Navigating the future of automotive retailing
        • Amazon Web Services: Any place, any time, any channel
        • Amazon Web Services: The power of the cloud
        • Amazon Web Services: Universal translator: Harnessing sensor data to build better automotive software
        • Epic Games: Transforming the auto industry with digital assets
        • FTI Consulting: Crisis as a catalyst for change
        • Google: 5 trends shaping the auto industry's approach to a new normal
        • IHS Markit: Automotive loyalty in the wake of the COVID-19 recession
        • IHS Markit: Autonomous vehicles: Automotive and transportation disruption
        • IHS Markit: COVID-19: The future mobility delusion
        • IHS Markit: The battery electric vehicle (BEV)
        • Level5: 2020 Automotive E-Commerce Report
        • Naked Lime: Bring social reputation together as part of big-picture marketing
        • Wells Fargo Auto: Switching gears from LIBOR to SOFR
        • Ally: Do It Right
        • DealerSocket
        • Deloitte: Cyber everywhere: Preparing for automotive safety in the face of cyber threats
        • Facebook: The road to a zero-friction future
        • Guide To Economic Development
        • PayPal Credit: How consumer financing helps drive sales for online auto parts retailers
      • Classifieds
      • Companies on the Move
      • People on the Move
      • Newsletters
      • Contact Us
      • Media Kit
      • RSS Feeds