High prices did not hurt sales of F&I products

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Buzzell also noted that alternative routes exist for some products, which can be funded directly with the consumer. He added that while such options are available, his group has not seen an increase in their use in a high price environment.

The average transaction price for a new vehicle in July hit a record high of $ 42,736, according to Kelley Blue Book. This represented an 8% increase from July 2020 and marked a fourth consecutive month of record average transaction prices.

In early August, inventories were 53% below 2020 levels and 68% below 2019 levels, according to Cox Automotive.

For used vehicles, wholesale prices fell 0.8% in the first 15 days of August compared to the same period in July, according to the Manheim Used Vehicle Value Index. However, they remain up 18% compared to the same period last year.

Justin Gasman, director of financial services at McCaddon Cadillac-Buick-GMC in Boulder, Colorado, said gross profits rose upstream of transactions, while the background “hasn’t changed significantly as the process in F&I is the same. “

“The only thing that maybe changes for F&I is that the amount financed is a little higher than before due to the sale price being essentially the MSRP on all of these transactions,” he said.

But for the F&I products themselves, it has always boiled down to buyers’ cash and equity.

That’s why little seems to have changed in the F&I landscape, despite the anomalous pricing environment, said Chris Tsiropoulos, managing partner at consultancy firm FIC Experts.

“The dealership world and the way of doing business revolve around an individual’s credit and what the bank will give them upfront,” he said. “So if the customer has excellent credit then that bank will take an additional leap of faith to encompass additional products. [while] others cut back. “


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