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Mad Marv

The Truth About PVR

August 30, 2010

Trainers preach its virtues, dealers fashion pay plans around it and F&I managers brag about it or lament its very existence. What we’re talking about here is profits per vehicle retailed (PVR), that mystical number we get judged by every month. I call it mystical because there seems to be no universal standard by which it’s calculated. I reckon I’ve heard just about every formula there is, yet I’m certain there is another twist in the making.

No matter where I go or who I have a chat with, PVR — also known as profits per retail unit, or PRU — is generally the first topic that comes up while having drinks with fellow F&I managers. We’ve adopted it as our measuring stick — the higher the number, the more clout we have among our peers. We become legendary, right?

I suppose those of you who are averaging above $1,000 may be feeling pretty good and poking out your chest just a bit. Well, not so fast. Let’s dig into what PVR is and try to get a better grip on it.

See, PVR is the total amount of F&I gross divided by retail sales in a given month. This seems simple enough, right? So where does the confusion stem from? Bravado would probably be the short answer.

Some F&I practitioners have a tendency to “disqualify” certain unit sales to reduce the number of retail units their total gross is divided into to increase their PVR. These disqualifiers usually include six-year-old or older units, high-mileage cars (100K miles or more), leases, fleets, yellow or green vehicles sold on Tuesdays, or blue and black trucks sold on Fridays.

Let’s identify the one word in both PVR and PRU that can easily solve how it’s formulated. That word would be “retail.” Let’s face it, there are really only two basic sale types we deal with every day — fleet and retail. Fleet sales are usually made to companies, municipalities or governments. 

Now, few indirect lenders, vehicle service contract or GAP providers will write coverage for fleet vehicles due to the risk exposure. In many cases, these vehicles are sold by the lowest bidder and delivered by a fleet manager or salesperson at the customer’s place of business. For these reasons, fleet sales should be excluded from the total.

The remaining sales are retail, plain and simple. Regardless of whether lenders will finance them due to their age or something else, F&I gross is averaged based on retail sales — not retail financeable units. Converting to this basic formula is like looking at your face in the mirror through a magnifying glass; it’s a sobering moment because the flaws become obvious. 

Including units that we previously tossed out is just as revealing, but it’s necessary because you’re just fooling yourself by tossing out units you should be counting. Yes, your PVR will be lower, but it will help you in the long run because it will force you to stretch and grow by digging deeper into your objection-handling toolbox to increase it.

Now that we’ve mustered the courage to count all retail units, let’s dig a bit deeper to understand the dynamics that impact PVR.

There are two major factors that impact PVR: finance penetration and per finance unit. Finance penetration is important because it puts you in front of more finance customers, thereby increasing your chances of product sales. It also increases your finance reserve. Per finance unit is derived by dividing the number of contracts into the total gross. This reveals what you’re doing every time you sit with a customer. 

Want to raise your PVR? Increase your finance penetration and per finance unit. Conventional wisdom dictates that the more times you get in front of a customer, the greater your PVR will be. It’s simple math.  

Now, you may be bristling at this notion if your pay plan factors in PVR and you’re allowed to discount certain units. I can appreciate the way you feel. However, understanding your true PVR will help you dig deeper to increase the two dynamics that will ultimately result in greater rewards for you and your department.

Marv Eleazer is the finance director at Langdale Ford in Valdosta, Ga. He can be reached at


  1. 1. Jim Radogna [ August 31, 2010 @ 06:18PM ]

    Great article Marv. As usual, you're telling it like it is!

  2. 2. asiasdad [ September 02, 2010 @ 02:45PM ]

    cut rate to get product. PVR means nothing if you're not maximum 35% reserve and

    minimum 65% product gross. When you start going towards/over a 50/50 ratio, you are not an F&I manager, you're a print [manager].

  3. 3. bob [ September 03, 2010 @ 09:13AM ]

    i don't know if you remember this, back in the eighties a f and i company presented a program to go to a factor instead of a pru. you would add all of your penetrations together and that would grade your success. i don't remember the exact formula for the units per month but it made sense me. dealership sells 150 units per month would need a factor of 175. i thought it was good because it was based on selling products. this eliminated the guy who makes money on rate only and not sell products but have a great prv. old idea

  4. 4. Marv Eleazer [ September 03, 2010 @ 09:52AM ]

    @Asiasdad-Your analogy is spot on. Back end product sales is the greatest reason we're in the F&I office.

    @Bob-I recall the formula you're referring to. The percentile totals exclude the finance penetration. Total back end percentages of 100% aggregate is minimal. The more products you're selling-the greater that number is.

    One of my points is that getting in front of the customer by increasing your finance penetration increases the chance you will sell more product. I'll sacrifice rate all day long to match or better a customer's bank to get the opportunity to present my wares.

    Reserve only benefits the dealer and the bank. Few F&I managers don't get the point that 25% of every dollar of reserve is GIVEN back to the bank due to the reserve stipulation in the dealer agreement. 100% of the profit of the product is retained by the dealer. Product is where it's at!

  5. 5. Ron Bork [ September 21, 2010 @ 04:34PM ]

    Are you all overlooking the net f & i numbers? What good is it to sell lots of product if it cancells in 3 to 6 weeks and creates an unhappy customer. Just the same as rate rape. Both temporary and misleading. Be a professional and present features and benefits and truly help your customers and your income will reflect accordingly with your abilities.

  6. 6. Scott Wilson [ September 22, 2010 @ 11:18AM ]

    Profit per finance contract and how good you are at putting deals together with your finance sources are what I look at. PFC really lets you know how well your manager does when the have the best opportunity to make money. It's like comparing a baseball player at bat with bases loaded.

    There are no "log books" to measure how good your manager is at getting tough deals financed. Someone who is good at this is who I want on my team. Some are weak, cowards or just don't have the skill to get deals done that are tough.

  7. 7. Marv Eleazer [ September 22, 2010 @ 04:49PM ]

    @Ron, you are spot on my friend!

    Chargebacks affect the net numbers and EVERY F&I manager should know exactly what those numbers/percentages are. Our dealer corrals all of our managers into the conference room once every month to review OUR operating statement (which is CPA audited BTW) and every possible department is broken down and analyzed for all to see and critique.

    Poor disclosure and weak selling skills will be revealed in high chargebacks. It's not what you gross-it's what you keep!

    @Scott-Excellent point!!

  8. 8. Joshua Pattillo [ March 05, 2012 @ 12:33PM ]

    I am a first time F&I manager and started 1 year ago, I have been in the car business for 12 years as a Sales associate and Sales manager. I trained at AFAS in Houston and since training have averaged $1083.00 PVR and $1818.00 PRU. I do not get to disqualify ANY unit so these are real #'s. Additionally I maintain a well below average Chargeback total which I attribute to True Full Disclosure at the point of sale. I try to perfect my craft every chance I get and I wish I would have "Broken In" to F&I a long time ago. Thanks for the great articles as I look forward to some day being in them, and for now will continue to read and adjust my presentation as is necessary to continue moving forward and never stand still.

  9. 9. Mad Marv [ March 06, 2012 @ 02:41PM ]

    Thanks for the kind words Joshua. Sounds like the folks at AFAS did a great job. Tip of the hat to Tony Dupaquier! The worst thing any of us can do is fool ourselves by manipulating the numbers to suit our preferences. Just be straight with yourself and your numbers will continue to improve. If you haven't signed up for the F&I Forum this magazine supports, I strongly urge you to do so. The link is located at the top of this page. They also have a presence on facebook Keep swinging for the fence and we will soon be reading about you!

  10. 10. John [ June 07, 2018 @ 11:03AM ]

    Hi Guys,

    I just landed a F&I position at a domestic dealership. Compensation package is 7% of total F&I net income, plus PVR Bonus which is roughly $1k. Small dealership pushes out 120cars/month on average. How would you guys rate this deal?

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Author Bio

Marv Eleazer

Finance Director

Marv is no insider. He’s an actual F&I manager with more than 20 years of experience. Get his from-the-trenches take on the industry every month at

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