FI showroom red and grey logo
MenuMENU
SearchSEARCH

Group 1 Hits Record PRU in Q1

Group 1 Automotive’s 117 U.S. dealerships averaged $1,718 in F&I gross profit per retail unit, a 4.9% increase from a year ago and a new company record.

by Tariq Kamal
May 10, 2018
Group 1 Hits Record PRU in Q1

 

3 min to read


The addition of Audi and Subaru franchises in El Paso, Texas, were among the highlights of a first-quarter investor call hosted by Group 1 Automotive. Photo by Smguy101 via Wikimedia Commons

HOUSTON — Executives representing America’s third-largest dealer group had good first-quarter news to report to investors in a late-April conference call: Group 1 Automotive’s U.S. operation set a new record for F&I gross profit per retail unit (PRU) and enjoyed significant increases in F&I revenue, same-store sales, new- and used-vehicle revenue, and fixed operations revenue.

The company, which also owns dealerships in the United Kingdom and Brazil, delivered a record $2.9 billion in revenue in the first quarter for a net income of $35.8 million. That figure could have been about $3 million higher, noted President and CEO Earl Hesterberg, considering the group commenced two major initiatives in the quarter: the launch of “Val-U-Line” stores to sell older-model, higher-mileage used vehicles and a new compensation model designed to improve service personnel retention.

Ad Loading...

“These initiatives, while adding cost in the short term, are vital to strengthening the long-term growth prospects of our used-vehicle and aftersales business segments,” Hesterberg said. “These businesses are much more stable and controllable than the new-vehicle portion of our business, which is very cyclical and appears to have recently peaked in both the U.S. and U.K.”

Val-U-Line is Group 1’s answer to Sonic Automotive’s EchoPark and Penske Automotive’s CarSense chains. It represents a new opportunity to move units that might otherwise have gone to auction.

The service-retention initiative includes flexible work schedules, revised pay plans for some workers, and $500 bonuses for others. Group 1 reported a 17% increase in U.S. service-department headcount for the quarter at a retention rate of 69%. U.S. fixed ops gross profit was up 8.4% on same-store revenue growth of 4.6%.

But the real story was in the finance department. Group 1’s president of U.S. operations, Daryl Kenningham, reported a record PRU of $1,718, a 4.7% ($81 per vehicle) improvement on the year-ago quarter.

“This increase was largely driven by increased product penetration, namely, extended warranties and maintenance contracts, which benefit our business by bringing customers back into our service shops,” Kenningham said.

Ad Loading...

F&I total gross profit increased by 16%, or $15.5 million, helping to drive total U.S. revenues of $2.1 billion — a 6.1% gain from the first quarter of 2017. Other key first-quarter metrics include:

• 7% year-over-year increase in U.S. new-vehicle revenue
• 8% increase in U.S. used-vehicle revenue
• 7.7% improvement in U.S. same-store used-vehicle sales

Executives also announced the purchase of Audi El Paso and Subaru El Paso. As two of the 12 franchises Group 1 has acquired worldwide thus far this year, the West Texas stores are projected to add $65 million to the group’s annual revenues.

Near the close of the call, Senior Vice President Peter DeLongchamps was asked by an analyst whether $1,600 per unit remains the company's F&I benchmark in the wake of the record quarter. He took the opportunity to recognize the personnel that comprises the group’s worldwide finance operation for their contributions to the company’s fiscal health.

“I’d like to thank all F&I teams in all three countries [who] are doing a terrific job this past quarter. And at the end of the day, we keep working on the underperforming stores, and it’s paid dividends, and we’re doing a much better job of selling products,” DeLongchamps said. “And I think the mid-$1,600 PVR is probably a good modeling number moving forward. We got rising interest rates and, with our stated plan to increase the used-car business, I think that’s a good number for you to continue modeling towards.”

More F&I

Photo of robot holding a laptop
F&Iby Hannah MitchellApril 27, 2026

How AI Will Drive the Next Wave of Innovation in Finance & Insurance

It’s time to take the next digital step to free F&I managers to handle the most challenging aspects of customer meetings.

Read More →
Photo of notepad and pen next to computer keyboard on desktop
F&IApril 13, 2026

Control in Sales Is an Illusion

Some of it should be given to the customer, but that doesn’t mean the F&I office relinquishes the process. In fact, a different approach both builds trust and boosts sales.

Read More →
Photo of external keyboard on office deak next to window
F&IApril 7, 2026

The Limited Warranty Game

Bringing it in-house benefits the dealership and its customers.

Read More →
Ad Loading...
Woman in casual clothing sitting at a desk
F&Iby Rick McCormickMarch 31, 2026

Curb The Confusion

Talk to F&I customers like you’d talk to a friend, without industry lingo or sales-like questions, and use hard proof to show, not tell, them about a need.

Read More →
Photo of man's hand on laptop computer keyboard with blank screen
F&IMarch 16, 2026

There Is Always one More Product

Helping F&I customers understand complementary offerings is likely to lead to more sales, based on the success of a high-performing practitioner of the philosophy.

Read More →
REGISTER FOR EFI 2026
F&Iby Kate SpataforaMarch 16, 2026

EFI Conference Extends Early Bird Discount as Room Block Nears Capacity

Ethical F&I Manager's Conference will take place at The Cosmopolitan Las Vegas on April 13–15, 2026.

Read More →
Ad Loading...
F&Iby StaffMarch 6, 2026

Explore the 12 Rules for an F&I Life at EFI

EFI 2026 will take place April 13–15 at The Cosmopolitan Las Vegas.

Read More →
F&IMarch 4, 2026

Creating Your Own Economy

In this video, Reese Dailey explains how effective follow-up drives better results across the dealership, including increased sales, higher F&I penetration, and stronger customer retention.

Read More →
F&Iby StaffMarch 2, 2026

Prove You Can Do F&I at EFI

‘So You Think You Can Do F&I’ is a live role-play contest taking place at the 2026 Ethical F&I Managers Conference.

Read More →
Ad Loading...
Image of two human hands, one holding the word yes, the other the word no
F&Iby Hannah MitchellMarch 1, 2026

Expect Yes in the F&I Office

It may be human nature to back off when a customer seems to say no to a product or service. But experts say F&I managers should operate as though the answer will be the opposite.

Read More →