AutoNation Inc., the No. 1 dealership group in the U.S., is closing in on an average F&I profit per vehicle of $2,000, as higher F&I product penetration helped lift finance and insurance profit per vehicle at all six of the nation's public retailers. AutoNation and Sonic Automotive Inc. each set all-time quarterly record highs in the metric.
F&I profits, next to fixed operations, insulated the public groups' profits amid flat U.S. new light-vehicle sales in the third quarter. For the majority of the public groups, F&I income made up about 4 percent of quarterly revenue but accounted for about 30 percent of gross profits.
AutoNation boosted its F&I profit per vehicle 8.4 percent, or $150, to an all-time quarterly record of $1,939.
Slowing new-vehicle sales in the coming months will likely hamper F&I profits, according to AutoNation interim CFO Christopher Cade.
"As you move more of a mix towards used away from new, there is a difference in total F&I [per vehicle retailed]. We've said in the past that's usually a few hundred dollars difference between the two," Cade said on a call with investors last month. "Then you combine that, though, with higher penetration rates and some pricing power that we have now on our brand extension, that's been an overall supporter."
Sonic, of Charlotte, N.C., posted the highest improvement in F&I gross profit per vehicle, with an increase of 18 percent year over year, or $266, to an all-time quarterly record of $1,771. On a consolidated basis, Sonic also posted an all-time quarterly record F&I gross profit, of $126.8 million, a nearly 30 percent increase.
Same-store F&I-profit-per-vehicle results at other groups:
- Group 1 Automotive Inc., of Houston, rose 3.2 percent, or $54, to $1,751.
- Asbury Automotive Group Inc., of Duluth, Ga., rose 7.9 percent, or $119, to $1,628.
- Lithia Motors Inc., of Medford, Ore., rose 7.3 percent, or $100, to $1,471.
- Penske Automotive Group Inc., of Bloomfield Hills, Mich., rose 4 percent, or $49, to $1,262.