5 out of 6 publicly traded dealer groups achieve $2K in F&I profit per car

5 out of 6 publicly traded dealer groups achieve $2K in F&I profit per car

Group 1 broke the $2,500 mark in the first quarter with an average same-store F&I profit of $2,504 on each deal, up 30 percent from a year earlier.

Group 1 F&I sales also rose, to $131.9 million, a 16 percent increase from the same time last year.

The company called profit primarily the result of higher revenues from finance, auto service contracts and other F&I products, as well as higher penetration rates.

“Our F&I adherence rate is high,” Daryl Kenningham, president of group 1 of US operations, told investors in April.

Pete DeLongchamps, Group 1’s Senior Vice President of Manufacturer Relations, Financial Services and Public Affairs said Group 1 made a margin of 1 percentage point for arranging financing, and said that “we are comfortable.”

The gains shown by Group 1 were the result of greater product penetration and success with more customers, he said.

Group 1 CEO Earl Hesterberg also told investors that if auto or financing margins decline, costs could fall due to court demand, but demand would increase.

“The strength of F&I is in increasing volume,” Hesterberg said.

Higher sales volume would prove “powerful compensation” for a hypothetical drop of $200 per vehicle, he said.

Group 1, of Houston, is at number 4 on Automotive News‘ top 150 dealer groups list, with retail sales of 146,072 new vehicles in 2021.