Group 1 Posts 12.3% Increase in F&I Revenue
The dealer group’s U.S. F&I operations raised its per-copy average $91 to $1,442 in the second quarter. On a year-to-date basis, the group's per-copy average rose $128 from a year ago to $1,499.
HOUSTON — Total U.S. revenues for Group 1 Automotive grew 9.5% to $2.06 billion in the second quarter, with the 12.3% increase in F&I revenue leading the way, the dealer group reported last week.
Officials attributed the increase in U.S. F&I revenue, which rose to $82.8 million, to a 5.3% increase in retail vehicle sales volume and improved profitability per retail unit, which grew $91, or 6.7%, to $1,442. The latter, along with a 10% increase in service and parts revenue, bolstered the group’s total gross profit, which grew 9.1% from a year ago to $317 million in the first quarter.
“I think that we’ve put a business plan in place five years ago. We’ve been executing on it,” said Peter Delongchamps, vice president of financial services. “So this is just a follow-up to the things that we’ve put in place. We continue to work very hard on the underperforming stores. And we’ve got great partners, both on our product side … and our lenders as well.
“So it’s a plan coming together, and we’re very pleased with the results and thankful for the job our dealer have done for us.”
Including Group 1’s UK and Brazilian operations, F&I revenue increased 12.9% to $90 million in the second quarter, while the group’s consolidated F&I per-copy average grew $124, or 10.4%, from a year ago to $1,319.
Year to date through June, F&I gross profit per retail unit on a consolidated basis grew from $1,223 to $1,299, with finance penetrating at a 68% rate. Acceptance rates for service contracts, GAP, prepaid maintenance and exterior protection were 33%, 24%, 8% and 17%, respectively.
In the U.S. market alone, the group’s year-to-date F&I per-copy average grew from $1,371 one year ago to $1,499. Finance penetrated at a rate of 73%, while service contracts, GAP, prepaid maintenance and sealant penetrated at rates of 40%, 26%, 10% and 18%, respectively.
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