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Survey: F&I Represents Second Largest Opportunity for Margin Growth

April 16, 2018

CHESTERFIELD, Mo. — Behind capturing the financing, the sale of F&I product offerings represents the second largest opportunity for margin growth for dealers (57.6%), according to results of a dealer survey conducted by Protective Asset Protection.

The F&I product provider surveyed 1,573 dealership owners and professionals between March 5-9. Results show that a majority of dealers are concerned with falling auto sales, as well as dealership consolidation and administrative challenges to their current roster of F&I products. More than three-quarters (78.8%) of dealers surveyed said their current F&I products don’t offer enough margin for the dealership, and nearly half (48.5%) said their current F&I offerings are too much of an administrative burden.

A significant number of dealers said they sell a vehicle service contract on 15% of all new vehicles sold, while 36% said they sell a vehicle service contract on 25% of used vehicles sold. Dealers also said the Top Three barriers to selling vehicle service contracts include inadequate coverage (66.7%), price and customers not seeing the value (both at 63.6%).

Ideally, 63.6% of dealers said they would like to have more control over claims adjudication for their F&I products, and another 57.6% said they would like to have control over branding their own F&I products. Training remains critical, as 54.5% said more training is needed to sell F&I products, and 51.5% said more education is needed to help sales staff when handing customers over to the F&I office.

“Margin opportunities will remain a central concern for dealers in the coming years, especially as sales pressures increase for both new and used vehicles,” said Rick Kurtz, senior vice president of distribution for Protective Asset Protection. “Many of these dealers will rely on F&I offerings to make up this margin, but they’re saying they want their own F&I products they can offer to their customers to increase margins further, help with the overall branded experience, and improve customer satisfaction.”


  1. 1. Rich [ April 19, 2018 @ 11:15AM ]

    I am sorry to say but our Dealership can NOT relate to any of this content. If 78% of dealers feel there is not enough margin, the Dealer Principal, GM and Finance Director need to address this and make the margin happen. This comes down your Finance team maximizing their deals by mastering the guidelines of the lenders, increasing the selling prices of products to the maximum allowed by banks, increasing the prices of services contracts, maintenance contracts, tire & wheel products and other products offered. If your entire department is not averaging at least $1600 per copy, your people need to get better or get new people who want to get better.
    If you have inadequate coverage from a 3rd party vendor, get a new higher quality vendor and increase your prices, confidence in the products is key to selling them and you want customers to have good experiences to keep buying products in the future. Stop selling price, take your time and build value in the coverage, customers know technology in cars is constantly changing and being added, there is so much unproved 1st generation technology that people should have covered. When needed offer customers discount after building value, chop the price in a professional manner to capture at smaller margins when needed.
    15% is horrible for new cars, that should be 50% minimum for new. 25% is also horrible on used, that should be at least 65% on a bad month.
    To me this all sounds like a Dealer Principal, GM and Finance Director issue, not an industry issue.

  2. 2. Mike Roderick Finance Di [ April 21, 2018 @ 09:02AM ]

    I couldn't agree more. I think this actually shows how disconnected a lot of Dealer Principals are. ( not mine) If you asked this question of people that actually run these companies I bet the number would be more in line with real life numbers. Furthermore what is " A significant number of dealers" ??? This is a very poorly written article with no name attached?? With statistics from a company trying to sell these DP's product. I put very little stock into this article.

  3. 3. Kerri [ May 05, 2018 @ 01:18PM ]

    I cannot even imagine who was surveyed for this article. They must be extremely limited in their knowledge base of the department. They should look into self insured products and some training.


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