{"id":580,"date":"2017-09-27T15:21:56","date_gmt":"2017-09-27T15:21:56","guid":{"rendered":"http:\/\/www.budcofinancial.com\/blog\/?p=580"},"modified":"2017-09-27T15:22:53","modified_gmt":"2017-09-27T15:22:53","slug":"increasing-fi-gross-profit-per-vehicle","status":"publish","type":"post","link":"https:\/\/www.budcofinancial.com\/blog\/increasing-fi-gross-profit-per-vehicle\/","title":{"rendered":"Increasing F&I Gross Profit Per Vehicle"},"content":{"rendered":"

Five of the six publicly-traded new-vehicle dealership groups increased F&I gross profit per vehicle<\/a> at the beginning of this year. This is a trend the groups attribute to acquisition, product sales, and enhanced collaboration between sales teams and the F&I office.<\/p>\n

Among those groups, Lithia Motors Inc. reached an all-time record by growing same-store F&I profit per vehicle<\/a> by 4.8%. Additionally, Lithia\u2019s penetration rates hit 46% for vehicle services contracts and 27% for lifetime oil changes, and the dealership group managed financing for 73% of its customers. The company\u2019s recent acquisition of DCH Group and Carbone Auto Group contributed to this rise in F&I and they are looking for opportunities to push F&I growth.<\/p>\n

Group 1 Automotive officials<\/a> reported that consolidating their lender base, enhancing the availability of financing (and subprime financing), integrating compliance, and providing transparency to the customers through benchmarking helped them boost F&I per vehicle retailed.<\/p>\n

So, beyond acquisition and focusing on enhancing the consumer experience, how can you successfully boost F&I profit in your dealership?<\/p>\n

Shift Your Sales Focus<\/strong><\/h3>\n

F&I products is a $77 billion business<\/a> \u2014with used-car dealerships at 29% of revenue, followed by used-vehicle sales at new-car dealerships (40%) and new-vehicles sales (31%).<\/p>\n

While it is typically easier to sell F&I add-ons in used-vehicle sales than new-vehicle sales, AutoNation reports that F&I profits on used cars tends to be lower<\/a> than on new cars. With the recent success of the new-vehicle dealership groups increasing F&I profit per vehicle, other dealership may want to look for opportunities to boost F&I revenue in new-vehicle sales. Focusing more on selling F&I products during new-vehicle sales can help your dealership achieve higher profits and shift the balance between used and new F&I revenue percentages.<\/p>\n

Your dealership should also consider what F&I products are popular in the current market. According to recent data<\/a>, average F&I product penetration rates in the U.S. are as follows: services contracts (40%), GAP insurance (28%), paint sealant (19%), and prepaid maintenance (12%). Knowing what the majority of customers will be attracted to gives you a good place to start.<\/p>\n

Additionally, when making a new vehicle sale, consider the type of customer you are dealing with to know which type of F&I products to push and how (see our Car Buyer Profiles<\/a>). Depending on where a customer is at in the buying cycle, they will be attracted to different add-ons, and often, if the customer feels you have made them a fair deal on the vehicle purchase, they are comfortable purchasing upgrades at full price.<\/p>\n

Improve Collaboration Between Sales and F&I<\/strong><\/h3>\n

Asbury Automotive Group reported<\/a> that the majority of their boost in F&I profit was driven by the sale of ancillary products through team collaboration. Ashbury\u2019s CEO said, “we have a great F&I team and trainers, and with that we think we’ve benefited through…products sales.\u201d<\/p>\n

To successfully transition a customer from the sales to the F&I department, your sales team needs to have a strong understanding of the F&I process and an ability to inform consumers about available products during the front-end of the sale. Beyond offering a variety of financing options, F&I managers should use an F&I menu that shows the consumer all their options and can be signed by the customer and added to the deal jacket.<\/p>\n

Dealers\u2019 sharper focus<\/a> on positioning the value of F&I products, broader acceptance by consumers and a wider array of products also help promote sales. AutoNation Inc<\/a> said customer acceptance of AutoNation-branded F&I products drove the F&I profit per vehicle boost. Therefore, it\u2019s also a good idea to have value-based sales collateral<\/a> about F&I products throughout the dealership that sales team and F&I managers can leverage to intrigue and educate consumers.<\/p>\n

For more automotive trends and F&I tips, follow Budco Financial on <\/em>LinkedIn<\/em><\/a> and <\/em>Twitter<\/em><\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Five of the six publicly-traded new-vehicle dealership groups increased F&I gross profit per vehicle at the beginning of this year. This is a trend the groups attribute to acquisition, product sales, and enhanced collaboration between sales teams and the F&I office. Among those groups, Lithia Motors Inc. reached an all-time record by growing same-store F&I […]<\/p>\n","protected":false},"author":2,"featured_media":581,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[3],"tags":[108,87,110,105,107,109,106],"class_list":["post-580","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-automotive","tag-collaboration","tag-fi","tag-fi-products","tag-gross-profit-per-vehicle","tag-new-vehicles","tag-new-vehicle-dealership-groups","tag-used-vehicles"],"acf":[],"aioseo_notices":[],"jetpack_featured_media_url":"https:\/\/www.budcofinancial.com\/blog\/wp-content\/uploads\/2017\/09\/BUD-2017-blogSEPT-blogheader.png","_links":{"self":[{"href":"https:\/\/www.budcofinancial.com\/blog\/wp-json\/wp\/v2\/posts\/580","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.budcofinancial.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.budcofinancial.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.budcofinancial.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.budcofinancial.com\/blog\/wp-json\/wp\/v2\/comments?post=580"}],"version-history":[{"count":2,"href":"https:\/\/www.budcofinancial.com\/blog\/wp-json\/wp\/v2\/posts\/580\/revisions"}],"predecessor-version":[{"id":583,"href":"https:\/\/www.budcofinancial.com\/blog\/wp-json\/wp\/v2\/posts\/580\/revisions\/583"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.budcofinancial.com\/blog\/wp-json\/wp\/v2\/media\/581"}],"wp:attachment":[{"href":"https:\/\/www.budcofinancial.com\/blog\/wp-json\/wp\/v2\/media?parent=580"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.budcofinancial.com\/blog\/wp-json\/wp\/v2\/categories?post=580"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.budcofinancial.com\/blog\/wp-json\/wp\/v2\/tags?post=580"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}