F&I profits soar at largest U.S. dealership groups

F&I profits soar at largest U.S. dealership groups

F&I revenue per vehicle and overall F&I revenue rose for most of the 150 largest dealership groups in the U.S. in 2020, according to an Automotive News survey.

Source: https://www.autonews.com/finance-insurance/fi-profits-soar-largest-us-dealership-groups

The nation’s public and private dealerships with the highest average F&I per-vehicle revenue in 2020 credit a pandemic-induced refocusing in the business office as the reason why their teams excelled during a tumultuous year. F&I revenue per vehicle and overall F&I revenue rose for most of the 150 largest dealership groups in the U.S. in 2020, according to an Automotive News survey, with increases reported by 87 of the 140 participating groups.

Total F&I revenue for the dealership groups increased 4.5 percent compared with 2019. In 2018, F&I revenue rose 7.5 percent. F&I revenue per vehicle dropped at 53 groups, and 133 averaged more than $1,000 per new and used vehicle.

Twenty-nine dealership groups posted average F&I revenue per vehicle above $2,000, a significant leap from 16 in 2018 and 12 in 2017. Four dealership groups reported an average F&I revenue above $3,000.

Automotive News examined the F&I results of the nation’s top 150 dealership groups, as ranked by new-vehicle retail sales in 2020. Of those, the survey looked at 140 groups that provided finance data for 2020.

$100 MILLION CLUB
Nineteen dealership groups reported F&I revenue above $100 million in 2020. AutoNation was the only retailer to exceed $1 billion in F&I revenue in 2020.
 2020 F&I revenueNo. of dealerships
AutoNation$1.06 billion235
Lithia Motors$579.8 million209
Penske Automotive Group$576.2 million260
Hendrick Automotive Group$570.7 million94
Sonic Automotive$489.9 million100
Group 1$467.9 million184
Asbury Automotive Group$305.1 million91
Larry H. Miller$187.6 million64
Staluppi Auto Group$185.4 million28
Greenway Automotive$180.8 million51
Ken Garff Automotive Group$179.7 million50
Jim Koons Automotive Cos.$171 million18
Morgan Auto Group$166.3 million45
Prime Automotive Group$127.5 million40
Napleton Automotive Group$123.7 million52
David Wilson Automotive Group$114.6 million18
Zeigler Auto Group$110.1 million28
Findlay Automotive Group$108.8 million32
RML Automotive$105.4 million32
Source: Automotive News Data & Research Center
TOP 15 F&I PERFORMERS
The dealership groups with the highest average F&I revenue per new and used vehicle retailed in 2020.
 Average F&I revenue per new and used vehicle
1. Empire Automotive Group$3,558
2. Lindsay Automotive Group$3,263
3. Cavender Auto Family$3,091
4. Staluppi Auto Group$3,046
5. Zeigler Auto Group$2,982
6. World Auto Group$2,978
7. Hendrick Automotive Group$2,895
8. Greenway Automotive$2,793
9. Bob Moore Auto Group$2,739
10. Courtesy Automotive Group$2,649
11. Future Automotive Group$2,608
12. Jim Koons Automotive Cos.$2,571
13. American Motors Corp.$2,447
14. Keyes Automotive Group$2,407
15. McCombs Automotive$2,343
Source: Automotive News Data & Research Center

Alan Haig, president of Haig Partners, a dealership buy-sell company in Fort Lauderdale, Fla., said F&I profits per vehicle continue to increase among dealership groups as transaction values go up and retailers improve product penetration.

“They continue to find products that consumers value and want to purchase as part of their F&I process,” Haig told Automotive News.

A main driver of F&I profits at Staluppi Auto Group, one of the leading retailers in terms of F&I revenue, was the motivation of F&I managers to sell more products among dwindling vehicle inventory, said John Staluppi Sr. With fewer opportunities to sell, managers had to maximize their income on every deal.

“The pandemic … helped get a lot of fat off the bone,” Staluppi said. “We’re selling a lot more products to customers.”Most improved

Empire Automotive Group, of Huntington Station, N.Y., had the highest F&I revenue per vehicle retailed with $3,558, up 86 percent from 2019. Empire, which has 10 stores and ranks 95th on the Automotive News list of top retailers by new-vehicle sales, also showed the most improvement on the average F&I profit per vehicle retailed among the groups.

Owner Michael Brown attributes the group’s success to training and motivating employees, and holding them accountable for their success. It is vital employees understand the F&I products and effectively articulate the benefits to the customer, he said.

“The way we look at the business is, ‘Does the customer come back?’ ” he said. “Some people might say, ‘You can’t drive those results in F&I and still have a customer-comes-back mentality.’ I don’t agree.”

Pay plans, training

Cavender Auto Family of San Antonio achieved $3,091 in average F&I profit per vehicle sold in 2020.

Cavender CFO Jon Briggs said his dealerships weren’t as impacted by shutdowns as stores in other parts of the country, and his customers were able to take full advantage of government stimulus assistance in the showroom.

Cavender also pays sales and F&I commission on front- and back-end gross for all vehicles sold, he said, to encourage the departments to work together.

“We have really aggressive F&I pay plans. It’s all contingent on performance with large percentages of gross,” he said.

Nineteen groups pulled in more than $100 million in F&I revenue in 2020, accounting for $5.81 billion, which made up more than half of the $10.46 billion in total F&I revenue for all 140 groups. Six of those 19 groups are publicly owned. In 2019, all participating groups pulled in $10 billion in F&I revenue for the year.

Combined, the 19 groups that exceeded $100 million in F&I revenue for 2020 produced an average of $2,114 per new and used vehicle, $337 more than the average of the 140 groups.

All six publicly owned groups lifted per-vehicle F&I revenue last year. AutoNation‘s was the highest, at $2,158, and Penske Automotive Group’s was the lowest, at $1,399. Lithia Motors had the most improved total F&I revenue from 2019, reporting a 12 percent increase to $579.8 million.

Prime Automotive Group saw a decline in its total F&I revenue, which dropped 20 percent to $127.5 million, largely because it sold 15 stores last year. The Westwood, Mass., group grew its F&I profit-per-vehicle retailed to $2,083, up from $1,925 in 2019. CEO Todd Skelton credits the training employees received from Safe-Guard, which helped create a standardized selling process — something he learned while at AutoNation for 27 years.

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