4 of the six publicly traded dealership teams within the first quarter posted decrease year-over-year common finance and insurance coverage gross revenue per car retailed the U.S. The drops have been single-digit.
Solely two teams confirmed will increase within the first quarter of 2023, with AutoNation up 1.6 % and Sonic Automotive up 0.1 %.
Increased rates of interest and car affordability negatively impacted F&I gross sales within the first three months of the yr, specialists stated.
Q1 outcomes for public dealership teams
| Asbury Automotive Group | Q1 2023 | Q1 2022 | Change |
|---|---|---|---|
| Avg. F&I gross revenue per car retailed | $2,352 | $2,544 | -7.5%  |
| F&I % of income | 4.8% | 5.3% | |
| F&I % of gross revenue | 23% | 25% |
| AutoNation | |||
|---|---|---|---|
| Avg. F&I gross revenue per car retailed | $2,717 | $2,673 | 1.6%  |
| F&I % of income | 5.2% | 5.4% | |
| F&I % of gross revenue | 26% | 28% |
| Group 1 Automotive | |||
|---|---|---|---|
| Avg. F&I gross revenue per car retailed | $2,259 | $2,449 | -7.8% |
| F&I % of income | 4.4% | 5% | |
| F&I % of gross revenue | 24% | 25% |
| Lithia Motors | |||
|---|---|---|---|
| Avg. F&I gross revenue per car retailed | $2,197 | $2,259 | -2.7% |
| F&I % of income | 4.6% | 4.7% | |
| F&I % of gross revenue | 26% | 24% |
| Penske Automotive Group* | |||
|---|---|---|---|
| Avg. F&I gross revenue per car retailed | $1,776 | $1,922 | -7.6% |
| F&I % of income | 3.3% | 3.6% | |
| F&I % of gross revenue | 20% | 21% |
| Sonic Automotive** | |||
|---|---|---|---|
| Avg. F&I gross revenue per car retailed | $2,318 | $2,316 | 0.1% |
| F&I % of income | 4.1% | 4.2% | |
| F&I % of gross revenue | 23% | 23% |
Asbury Automotive Group reported $2,352 in common finance-and-insurance gross revenue per car within the first quarter, up $119 from the earlier quarter however down 7.5 % from the primary quarter of 2022.
The group hasn’t skilled difficulties arranging auto financing, based on executives.
“Concerning shopper financing typically, we don’t see a measurable influence of credit score tightening within the quarter,” stated Dan Clara, Asbury operations senior vp, throughout an earnings name April 25.
CEO David Hult stated Asbury additionally wasn’t affected by credit-tightening to this point within the second quarter. However he famous solely about 10 % of Asbury’s enterprise traditionally is from clients with subprime credit score, and in March that proportion fell to about 7 %. Asbury’s “core” shopper has a credit score rating above 700, he stated.
Some lenders had tightened credit score, Hult stated. However Asbury has a pool of greater than 250 companion lenders to pair customers with on offers and “we simply do not have a difficulty looking for lending,” he stated.
Asbury additionally supplied an replace on its F&I merchandise supplier Whole Care Auto, which it acquired in 2021 as a part of the Larry H. Miller Dealerships transaction. Asbury CFO Michael Welch stated the Whole Care Auto merchandise had been launched inside legacy Asbury shops in Colorado, Texas and the St. Louis space, however the group nonetheless wanted to broaden to its places in Georgia and Florida. He known as the transition on monitor with Asbury’s expectations.
“We’re making good progress on getting that rolled out,” Welch stated. “It is only a gradual course of all through your complete 2023.”
Asbury, of Duluth, Ga., is No. 5 on Automotive Information‘ record of the highest 150 dealership teams primarily based within the U.S., with gross sales of 151,179 new automobiles in 2022.
AutoNation noticed combined leads to its F&I numbers for the primary quarter, with a rise in gross revenue per car and a lower in income.
The corporate booked $2,717 in common same-store F&I gross revenue per car, up 1.6 % from the identical interval a yr in the past. That is $13 greater than fourth-quarter 2022.
The outcomes come a couple of months after AutoNation closed on its buy of lender CIG Monetary, now known as AutoNation Finance. The corporate is pleased with the division’s efficiency to this point, CEO Mike Manley advised buyers and analysts on an April 20 earnings name.
“We’re happy with the effectiveness of [AutoNation] Finance and its skill to compete with different monetary establishments and assembly our buyer wants,” Manley stated, including that the corporate will proceed working with different lenders and has “nice relationships” with them.
Market penetration for monetary product choices that AutoNation sells stays steady, Manley stated, acknowledging that some customers are delicate to month-to-month funds as they cope with greater rates of interest.
AutoNation, of Fort Lauderdale, Fla., is No. 2 on Automotive Information‘ high 150 dealership teams record, retailing 229,971 new automobiles in 2022.
Group 1 Automotive generated $2,259 in common F&I gross revenue per car retailed within the first quarter, down 7.8 % from the identical interval a yr in the past.
CEO Darryl Kenningham stated within the firm’s April 26 first-quarter earnings name that the enterprise has remained sturdy. Shifting forward, nonetheless, he stated he expects continued softening of the enterprise.
“We do anticipate some continued moderation in F&I gross revenue as a consequence of strain on finance penetration charges, pushed by current rates of interest and barely tighter lending necessities for some consumers,” Kenningham stated.
Group 1, of Houston, retailed 154,714 new automobiles in 2022 and is No. 4 on Automotive Information‘ record of the highest 150 dealerships teams.
Lithia Motors’ common same-store F&I gross revenue per unit retailed was $2,197 within the first quarter, down 2.7 %. F&I used to be 26 % of Lithia’s gross revenue within the quarter, up from 24 % within the year-earlier interval.
“The design and extension of our F&I product choices that promote the retention of consumers, assist us keep the connection by means of your complete lifecycle of the car for customers in any respect affordability ranges,” stated Lithia COO Chris Holzshu through the firm’s first-quarter earnings name on April 19.
Lithia, of Medford, Ore., retailed 271,596 automobiles in 2022 and is No. 1 on Automotive Information‘ record of the highest 150 dealership teams within the U.S.
F&I revenue of $200 million, down 7.1 % in contrast with the identical interval a yr in the past.
Excluding Penske’s U.Okay. company gross sales, worldwide same-store retail F&I gross revenue per car retailed was $1,776. That was down 7.6 % from $1,922 within the first quarter a yr in the past.
Increased month-to-month car funds within the quarter contributed to customers’ willingness to buy insurance coverage merchandise, Government Vice President Tony Pordon advised Automotive Information. That possible put unfavorable strain on Penske’s first-quarter F&I enterprise, the corporate stated.
“Automobile affordability for customers is one thing to contemplate,” Pordon stated. “Moreover, we had a combination shift in our financing contracts to greater captive penetration.”
Penske, of Bloomfield Hills, Mich., is No. 3 on Automotive Information‘ record of the highest 150 dealership teams primarily based within the U.S., retailing 185,831 new automobiles in 2022.
Sonic’s same-store common F&I gross revenue per unit retailed was up 0.1 % to $2,318 at its franchised dealerships within the first quarter. Finance and insurance coverage represented 23 % of Sonic’s first-quarter gross revenue, the identical proportion as the identical interval a yr in the past.
“Regardless of an elevated rate of interest atmosphere that has decreased our finance contract penetration charge, F&I efficiency continues to be a power, and we wish to reiterate our steering for full yr 2023 F&I per unit at or above $2,400 per unit,” Sonic Automotive CEO David Smith stated through the firm’s first-quarter earnings name on April 27.
Sonic, of Charlotte, N.C., retailed 101,168 new automobiles in 2022 and is No. 6 on Automotive Information‘ record of the highest 150 dealership teams primarily based within the U.S.
Mark Hollmer, John Huetter and Jack Walsworth contributed to this report.