Lithia’s year-over-year, same-store F&I sales grew 18.2% to $39.6 million on 33,590 total units sold. Lithia’s gross F&I revenue per unit climbed 5.7% to $1,180.
These are eye-popping growth figures, folks. By way of comparison, AutoNation, Asbury and Sonic have all reported first quarter earnings already, and their F&I revenue growth last quarter was:
- AutoNation +9.3%
- Asbury +8.5%
- Sonic +4.4%
While F&I makes up but 3.7% of Lithia’s total revenue, the growth figures deserve notice. It appears that Lithia is scoring this growth in two ways:
- By increasing its penetration rates — to 72% from 70% in the same quarter of 2013 on arranged financing and to 44% from 41% on service contracts; and
- By arranging more subprime financing — which comprised 14% of its financing book last quarter, up from 12% in 1Q13, while prime financing dropped to 67% of the total from 69%.
Lithia will conduct its quarterly earnings call later this morning. (See here for details.) We expect more specifics on its F&I performance then.