Total Care Auto will give Asbury Automotive Group Inc. full control of an increasingly lucrative dealership business when its F&I products reach Asbury's stores.
"We see this as game -changing," CEO David Hult said last week. He said Asbury anticipates selling its new subsidiary's finance and insurance contracts within three years.
Asbury wanted to sell its own F&I products years ago, Hult said, but the business would have presented an accounting challenge to the publicly traded dealership group.
Instead, it will incorporate Larry H. Miller Dealerships' longtime in-house provider, Total Care Auto, as part of its $3.2 billion deal for the retail group. Total Care Auto "is a part of the fabric" of the Larry H. Miller group and an "extremely well-run business" that generates large margins, Hult said. It produces about $240 million in revenue, has about 2 million contracts open and delivers EBITDA margins of more than 20 percent, Asbury said in announcing the deal last month.