Buzzell, too, noted alternative routes exist for some products, which can be financed directly with the consumer. He added that while such options are available, his group has not seen a rise in their usage amid the high pricing environment.
The average transaction price for a new vehicle in July reached a record $42,736, according to Kelley Blue Book. That represented an 8 percent increase from July 2020 and marked a fourth straight month of record-high average transaction prices.
At the beginning of August, inventories were running 53 percent below 2020 levels and 68 percent below 2019 levels, according to Cox Automotive.
For used vehicles, wholesale prices dipped 0.8 percent in the first 15 days of August compared with the same period in July, according to the Manheim Used Vehicle Value Index. However, they remain up 18 percent over the same period last year.
Justin Gasman, financial services director at McCaddon Cadillac-Buick-GMC in Boulder, Colo., said gross profits have gone up on the front end of transactions, while the back end "has not changed substantially because the process in F&I is the same."
"The only thing that's changing maybe for F&I is that the amount financed is a tiny bit more than it used to be because of the selling price being basically MSRP on all these deals," he said.
But for the F&I products themselves, it always has boiled down to cash is king and buyers' equity.
That's why little has appeared to have changed in the F&I landscape, despite the abnormal pricing environment, said Chris Tsiropoulos, managing partner of consulting firm FIC Experts.
"The dealer world and dealer way of doing business revolves around the credit of an individual and what the bank will give them as an advance," he said. "So if the customer has excellent credit, then that bank will take the extra leap of faith to encompass additional products [while] others trim back."