Lithia Motors Inc., now one of the largest publicly traded dealership groups in the U.S. thanks to the recent acquisition of DCH Auto Group, saw its F&I per vehicle increase to $1,202, up from $1,105 at the same time last year, or an increase of $97 per vehicle.
During the company’s earnings call last week, Bryan Deboer, chief executive officer, president and director, said that Lithia also arranged financing on 72% of the vehicles sold in the third quarter.
However, despite the increase, Lithia’s per-vehicle F&I finished the quarter $89 lower than the average for its peers, according to the company’s 3Q earnings presentation.
In response to a question from an analyst on the call on the company’s plan to narrow that gap, CFO and SVP Christopher S. Holzshu said that Lithia’s opportunity to grow could come from finding a balance of products in each store, rather than additional penetration.
“I think it’s just trying to find the right pricing in the right mix of products to offer in each one of our stores,” Holzshu said. “And as we continue to try new things, offer different products in different stores, we’re seeing that take hold and feel like that’s really what’s responsible for the success that we’re seeing in the growth, that we’re seeing in F&I PVR.”
Lithia recently announced the completion of its planned DCH acquisition on October 1, as well as an amendment to its existing credit facility, increasing the total financial commitment to $1.7 billion, up from $1.0 billion through its previous facility.
The new agreement is comprised of 16 financial institutions, including seven manufacturer-affiliated finance companies, and provides for up to $1.25 billion in new vehicle inventory floorplan financing, up to $150 million in used vehicle inventory floorplan financing and a maximum of $300 million in revolving financing for general corporate purposes, including acquisitions and working capital, according to a 10-Q filed Friday. The new credit facility may be expanded to $1.85 billion total availability, subject to lender approval.
