Tag Archive | "F&I Profit"

F&I Dealer of the Year Nominations Now Being Accepted


TORRANCE, Calif. — F&I and Showroom is now accepting nominations for its 2018 F&I Dealer of the Year and F&I Pacesetters contest, which is being sponsored by American Financial & Automotive Services Inc. for the second year in a row. The nomination period ends Aug. 15, 2018.

Now in its 17th year, the F&I Dealer of the Year and F&I Pacesetters program recognizes operations with highly profitable F&I departments that demonstrate a commitment to regulatory compliance and customer satisfaction. Dealership employees, general agents, vendors, and F&I product providers are encouraged to nominate their stores and dealer clients for the award.

“This is my favorite time of year, when we get to honor the top F&I operations in the nation,” said Gregory Arroyo, editorial director of F&I and Showroom and Auto Dealer Todaymagazines. “And I’d like to thank Arden Hetland and the team at American Financial & Automotive Services for giving us the opportunity to do so by once again sponsoring our annual awards program.”

Hetland, president of American Financial & Automotive Services, added: “We are proud to sponsor the F&I Pacesetter and F&I Dealer of the Year contest. For over 35 years, we have prided ourselves in giving back to the industry.  Sponsoring these awards for the second year in a row is our way of saying thank you.”

The magazine will first select six finalists, or F&I Pacesetters of the Year. They will be featured in the magazine’s conference issue and recognized during a special awards ceremony at Industry Summit 2018, which is scheduled for Oct. 8–10 at the Caribe Royale Orlando in Orlando, Fla.

At the conclusion of the ceremony, one finalist will be named the 2018 F&I Dealer of the Year. That operation will also appear on the cover of F&I and Showroom’s December 2018 issue, which will feature an extended profile on the winning operation.

To nominate a dealership or dealer group, fill out the contest’s nomination form as completely as possible. List any and all awards or certifications earned by the dealership and its F&I team, as well as describe in detail the process followed by the operation’s F&I staffers. Be sure to note whether the dealership or group employs any special compliance process, such as the National Automobile Dealers Association’s Fair Credit Compliance Policy & Program, or has updated its sales and F&I processes to address new buying habits or to improve the customer experience.

Consumer ratings on DealerRater, Yelp, Google, and Facebook are also considered during the judging process, as well as an operation’s standing with the Better Business Bureau.

“Great product penetration rates and per-copy averages will get you noticed, but we look at the complete picture when selecting the six finalists and our eventual F&I Dealer of the Year,” Arroyo said. “Again, we’re looking for highly profitable F&I departments that demonstrate a commitment to regulatory compliance, ethics, and a customer-centric F&I Process. If that describes your store or your client, nominate them today.”

For more information or to nominate a dealership or dealer group, click here.

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Group 1’s F&I Per-Copy Average Jumps $65 in the U.S. Market


HOUSTON — Group 1 Automotive, an international dealer group with outlets in the United States, the United Kingdom and Brazil, raised its consolidated F&I profit per-copy average by $27 to $1,352. The group’s U.S.-based F&I operations continued to live $1,500 per copy.

In the United States, the group’s F&I operations averaged $1,515 in F&I per vehicle retailed (PVR), a $65 improvement over last year. Its consolidated average was held down by the $54 and $238 PVR drops in the United Kingdom and Brazil, where the average stood at $693 and $399, respectively.

For the first nine months of the year, the group’s per-copy average for its U.S.-based F&I operations was $1,529, up $79 from the first nine months of 2014.

The PVR increase in Group 1’s U.S. market was driven, in part, by an increase in penetration rates for most of the group’s F&I product offerings. Officials also listed consolidation of its lender base, the availability of consumer financing, including improved subprime financing, and integrating compliance, training and benchmarking to create a transparent customer experience as other drivers.

“We are very pleased with where we are and we work every day to improve the underperforming stores and increase our product penetrations,” said Peter DeLongchamps, vice president of financial services and manufacturer relations. “So that’s just been a lot of hard work by my team and we are delighted with the results.”

Product acceptance rates varied in the group’s three markets, with service contracts leading the way in every one. In the United States, service contracts penetrated at a rate of 40%, while GAP, prepaid maintenance and the group’s paint sealant product posting acceptance rates of 28%, 12% and 19%, respectively.

The group posted a 10.8% increase in U.S. same-store F&I gross profit, which totaled $97 million, while total F&I revenue grew by 12% from a year ago.

For the quarter, the group posted record earnings and revenue. Total revenue increased 6.6% to an all-time quarterly record of $2.8 billion, while total gross profit grew 6.3% to an all-time quarter record of $398.4 million. The group also reported record adjusted net income of $46 million, a 15.7% increase from a year ago.

All three of the group’s markets sold a combined 47,126 new vehicles and 32,491 used vehicles on a same-store basis during the third quarter. Its U.S. operations accounted for 37,132 of the new vehicles sold and 26,756 of the used vehicles sold. All three markets experienced double-digit increase in used-vehicle sales, the U.K. market realizing the largest increase during the period compared to a year ago.

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AutoNation’s PVR Average Surpasses $1,500


FORT LAUDERDALE, Fla. — For the first time, AutoNation reported F&I gross profit per vehicle retailed (PVR) of more than $1,500, an all-time high for the public dealer group.

The group saw an average gross PVR of $1,515 during the first quarter 2015, up $114, or 8.1%, from a year ago. Approximately two-thirds of that profit was related to the sale of F&I products, while the other third was related to finance, officials said during a conference call on Wednesday.

Chairman, President and CEO Mike Jackson attributed the increase to the dealer group’s technology and training initiatives in its stores. He added that AutoNation intends to focus on product sales going forward.

“All of that growth has been on the product side and we intend to take a big step launching a pilot in the third quarter where … we will now offer our own maintenance contracts under the AutoNation brand name,” the executive explained. “And we feel this will be another growth opportunity that has potential to be very beneficial in 2016 as we get through the pilot study.”

Another new initiative currently underway at AutoNation is its Express process, which gives customers the ability to conduct the car-buying process largely online. Now with 120 days of operation under its belt, Express is helping the dealer group realize its goal of cutting down on third-party lead providers.

“So we’ve significantly outgrown and had a crossover as far as our dependence upon third-party sites,” COO Bill Berman told callers. “As far as its transactional capability under the flag AutoNation Express, it’s now active in 84 of our stores. It’s been very well accepted by our customers and by the stores.”

Express will be rolled out to the rest of AutoNation’s storefronts over the course of 2015.

Officials also reported a first quarter net income from continuing operations of $112 million, or $0.97 per share — a 29% improvement on a per-share basis over the same period in 2014. First quarter 2015 revenue totaled $4.9 billion, an increase of 13%, driven by stronger performance in all business sectors — new vehicles, used vehicles, parts and service, and F&I. New-vehicle unit sales increased 10% overall and 9% on a same-store basis, while retail used-vehicle unit sales increased 12% overall and 11% on a same-store basis.

Also during the conference call, Jackson touched on the Consumer Financial Protection Bureau’s crackdown on dealer markup. The executive said he doesn’t sense any impending moves by the banking industry toward flat fees to appease the CFPB. In order to cull discrimination against minority buyers, the regulator has suggested that finance sources eliminate the ability of dealers to mark up an interest rate on retail installment sale transactions in exchange for services rendered.

“… I can certainly speak for our portfolio. There is no sign of disparate impact, let alone discrimination,” Jackson said.

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Lithia’s Drop in New-Vehicle Gross Per Unit Offset by Q1 F&I Performance


MEDFORD, Ore. — Lithia Motors’ F&I operations realized a $52 increase in F&I profit per vehicle retailed, which settled in at $1,233 in the first quarter of 2015.

The group’s F&I performance, coupled with the $97 increase in used-vehicle gross profit per vehicle retailed ($2,602), helped the 130-store dealer group offset lower new-vehicle gross profit per unit, which fell $90 to $2,160.

“In the first quarter, the blended overall gross profit per unit was $3,646 compared to $3,599 last year, or an increase of $57 …,” said Bryan Deboer, Lithia’s president and CEO, during the group’s quarterly investor call on Tuesday. “While we continue to see lower new-vehicle gross profit per unit, this was more than offset by improvement in used-vehicle gross profit per unit and F&I per vehicle.”

Lithia Motors not only posted its best quarterly results since 2006, it also realized its highest first quarter adjusted net income in company history, which rose from $27.1 million in the year-ago period to $36.9 million. On per-share basis, earnings increased 35% from a year ago to $1.38 per share.

Revenue increased 66% from a year ago to approximately $1.8 million, with the group realizing double-digit increases in all of its four business lines on a same-store basis.

Total sales increased 11%, while new-vehicle revenues increased 11.3% on a same-store basis to $639,501. The average selling price increased 3%, while unit sales increased 8.5% from a year ago to 18,567 units.

Used-vehicle revenues increased 11.1% to $333,300, while the average selling price increased 4%. The dealer group also retailed 6% more used vehicles than a year ago, with the group selling 0.9 used vehicles for every new-vehicle sold.

Revenue from service, body and parts increased 11.1% from a year ago to $1.2 million, with revenues from customer pay and warranty-related work increasing 19% and 31%, respectively. Wholesale parts revenues also increased 5%, while body shop revenues showed a slight decrease of 3%.

“We delivered the best first quarter earnings in our company’s history, and the second best quarterly earnings ever,” Deboer noted. “For the fourth consecutive quarter, we achieved double-digit growth in same-store sales in all business lines. We remain focused on capturing additional market share, improving existing store results, and the continued success, integration and growth of DCH and actively seeking accretive acquisitions.”

Last June, Lithia agreed to buy DCH Auto Group, a 27-store operation with stores in California, New York and New Jersey. The acquisition made Lithia the fifth largest dealer group by store count.

“We believe that the integration of DCH has gone very smoothly,” Deboer said on Tuesday, noting that the group continues to explore other acquisitions.

“We are not solely looking at $500 million or $1 billion acquisition,” he added. “We’re still looking at our typical strategies where we buy $50 million to $70 million store size. And there is a pretty active market in that arena both in our exclusive markets and now in the metropolitan market.”

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Group 1 Records All-Time High for Gross Profit in Q1


HOUSTON – Group 1 Automotive Inc. set new records for total gross profit, as well as first-quarter revenue and F&I gross profit per vehicle sold.

First-quarter net income stood at $23.1 million, a 49.1 percent increase. Total revenue rose 18 percent to $1.66 billion, a new first-quarter record and a second best all-time high in the company’s history, according to F&I and Showroom magazine.

Total gross margin came in at 15.6 percent, as gross profit grew 17.4 percent from a year ago to an all-time record of $260.4 million. Additionally, new-vehicle gross profit increased 23.5 percent on 16.3 percent higher revenues, as the company retailed 13.1 percent more units. The average selling price also expanded 2.9 percent to $32,674.

Used-vehicle sales for the group surged 24 percent, while the average selling price increased 3.4 percent to $20,000, driving gross profit growth of 25.9 percent on 28.3 percent higher revenues.

F&I gross profit per retail unit came in at $1,175, a record first-quarter result. Parts and service revenues increased 9.3 percent from the prior year, which company officials attributed to growth in customer-pay, wholesale parts and collision businesses.

“Group 1’s strong, first-quarter operating and financial results included record-setting revenues, gross profit and earnings for our shareholders,” said Earl J. Hesterberg, Group 1’s president and chief executive officer. “Based on the first-quarter results, we now expect new vehicle industry sales of 14.5 million units in 2012.”

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F&I and New-Vehicle Profitability Drive Profit Gains for AutoNation


FORT LAUDERDALE – AutoNation Inc. reported increased profitability in each of its business sectors for the first quarter, with revenue up 10 percent and gross profit up 6 percent. Officials attributed the healthy profit gains to F&I performance and new-vehicle sales.

Net income from continuing operations rose almost 6 percent to $74 million for the quarter compared to the year-ago period. Revenue rose from $3.3 billion last year to 3.7 billion, with new-vehicle unit sales increasing 8 percent on a same-store basis and 10 percent overall, according to F&I and Showroom magazine.

Driven by increases in F&I and new-vehicle gross profits, overall gross profit for the dealer group increased 6 percent from the year-ago period to $603 million in the first quarter. F&I gross profit increased 7.2 percent per vehicle retailed to $1,213.

Officials also attributed the company’s gross profit gains to the $4.6 million, or $82 on a per new-vehicle retailed basis, related to additional incentives on premium luxury vehicles previously sold.

“The renaissance in auto retail is well underway, reflected in a seasonally adjusted U.S. industry annual selling rate of 14.5 million units for the first quarter of 2012,” said Mike Jackson, Chairman and Chief Executive Officer. “We have increased our 2012 U.S. industry new-vehicle sales forecast to mid-14 million units, as we see continued momentum in U.S. auto sales.”

During the first quarter of 2012, AutoNation repurchased 11.7 million shares of common stock, or 9 percent of the shares outstanding as of Dec. 31, 2011, for an aggregate purchase price of $405.4 million. From April 1 through April 24, 2012, the company also repurchased 2.1 million shares for an aggregate purchase price of $70.8 million. As of April 24, 2012, there were approximately 122 million shares outstanding.

By segment, AutoNation’s domestic-brand stores experienced a 16 percent increase in new-vehicle unit sales, with income ($50 million) up $7 million from the year-ago period. The group’s import stores, which income of $62 million, also increased new-vehicle unit sales by 6 percent. New-vehicle unit sales for the group’s premium luxury stores were up 14 percent. Net income for those stores increase by $1 million to $59 million.

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