There was much rumbling at our Auto Finance Risk Summit this week about how the large dealership groups are once again throwing their weight around when it comes to “preferred lender” programs. Indeed, the pendulum of leverage seems to have swung back to the dealership groups.
It is quite clear why when you look at the numbers. The eight publicly traded dealership groups accounted for $540 million of F&I revenue in the first quarter alone, according an AutoFinanceNews.net analysis. Further, F&I revenue is booming at the dealership groups, up 23.5% last quarter alone compared to the same period in 2009. Now, 2009 was an off year in every way, but 23.5% growth is still substantial.
As the numbers above show, of the public dealership groups, all but Lithia saw double digit YOY F&I revenue growth last quarter. And with greater F&I revenue at stake, I am expecting more “preferred lender” jostling in the months to come.
