Slowing new-vehicle sales failed to dampen the finance and insurance profits of the nation's public retailers in the second quarter.
All six public new-vehicle dealership groups increased F&I profit per vehicle, with Sonic Automotive, of Charlotte, N.C., and Group 1 Automotive, of Houston, posting all-time quarterly records.
New-vehicle sales, which typically offer the biggest opportunity for F&I profits, fell or stagnated for every public retailer in the second quarter. AutoNation leaders said higher used-vehicle sales hamper its overall F&I profit per vehicle, but Sonic executives said its F&I profit is stronger on used vehicles.
AutoNation, of Fort Lauderdale, Fla., ranked No. 1 for the quarter in same-store F&I profit per vehicle retailed with an average $1,926, an increase of 7.5 percent, or $134, from year-earlier figures.
CEO Cheryl Miller said the recipe for maintaining top F&I results is the combined strength of AutoNation's branded F&I products and consistent training of F&I managers to follow the retailer's standard processes. F&I profit is typically higher on new vehicles than used vehicles at AutoNation, according to Miller, and increasing used-vehicle sales will pressure those results.
"As we add additional used, or as we like to call it, nearly new business, in that does blend it down some, but we've been able to outperform that with a talented team of associates combined with having our own products in that area," Miller said.
The other public groups reported the following same-store F&I profit per vehicle results:
- Group 1 rose 9.7 percent, or $161, to $1,821.
- Sonic rose 7 percent, or $108, to $1,644.
- Lithia Motors, of Medford, Ore., rose 11 percent, or $147, to $1,451.
- Asbury Automotive Group, of Duluth, Ga., rose 8.4 percent, or $128, to $1,659.
- Penske Automotive Group, of Bloomfield Hills, Mich., rose 7 percent, or $85, to $1,302.