Although finance and insurance has its legal risks when non-complying or outright shady employees are in the F&I office, it remains a big profit center for dealers.
Many dealerships, in the age of full disclosure and greater scrutiny, have found that F&I compliance and profits can go hand in hand.
“Finance and insurance is very profitable for us,” says John Voss, owner of Voss Chevrolet, in Centerville, OH.
The dealership, ranked 296th overall on the Ward's 500, uses a strict menu-selling process and caps its limits, “so we treat everybody the same,” Voss says.
Its F&I revenues totaled $2.77 million on new-car sales of 2,215 and used-car sales of 10,60.
Profits have increased in recent years, because of new products and the fact that people will always have to finance their vehicles, he says.
New technology such as DealerTrack Inc.'s and Route One's web-based financing portals have helped streamline the process and significantly cut the amount of time it takes to both process and fund a deal, says Voss.
Dealerships on the Ward's 500 averaged $4,055,764 in F&I revenue in 2005, up from $3.7 million in 2004. Combining new and used vehicles sold, the Ward's 500 averaged $989 in F&I revenue per vehicle sale.
Nissan's 22 dealers on the Ward's 500 average the most F&I revenues of any brand with $5.5 million at $1,312 per vehicle retailed, led by Cerritos (CA) Nissan, ranking No. 6 in F&I with $14.53 million.
Dealerships selling multiple brands are next with $5.2 million in average F&I revenues. Their average per sale is $1,132.
General Motors Corp. Chevrolet Div. dealers also generate a lot of F&I revenue with $5.2 million at $1,183 per vehicle sold.
Luxury brands do not fare as well with F&I. Lexus stores report a $689 average F&I revenue per sale. BMW dealers on the ranking had $894 per sale. Mercedes dealerships do better with F&I, averaging $1,112 per vehicle sold.
Top 10 Finance & Insurance Revenue
|Overall Rank||Dealership||F&I Revenue|
|53||Midway Auto Team||$14,793,350|
|6||Dave Smith Motors||$13,727,610|