To what extent the coronavirus pandemic will wreak havoc on the automotive finance sector is a mystery. But what is known is that finance and insurance profits and product sales have been roiled.
J.D. Power data suggests that F&I profits fell in the weeks following shelter-in-place orders aimed at mitigating the spread of COVID-19, particularly in areas hardest hit and with stricter government closures.
Yet in areas with looser restrictions and where dealerships were established early on as essential businesses, F&I sales reached historic highs.
F&I profit per vehicle rose by about 50 percent at Planet Hyundai in Golden, Colo., in April compared with previous months, even as vehicle sales fell off a cliff. But even with a larger sample size in May, profits remained hundreds of dollars above average.
Vehicle sales were down an "apocalyptic" 90 percent for six consecutive weeks, according to General Manager Jamie Payne, though the store was rebounding strongly.
"We were able to unlock our sales doors 10 days ago," Payne told Automotive News on May 19. "We're pacing up in sales year over year."
In the months before COVID-19 closures, Planet Hyundai made about $1,000 in F&I profit per vehicle for new- and used-vehicle sales. The store averaged $1,500 per vehicle in April and $1,450 in May.
"There's just so much uncertainty in the market right now," Payne said. "It's creating this opening where [finance] didn't really have that angle to play before."