Lithia expects flat per-unit F&I revenue through 2015

Lithia's average F&I revenue per unit was $1,206 for the second quarter of 2014. That was below an average of $1,279 in the quarter for the six largest publicly traded new-vehicle retailers.

Lithia Motors expects average F&I revenue per vehicle retailed to stay flat through the rest of 2014 and 2015, at the current level of about $1,200 on a same-store basis. The retailer expects same-store average F&I revenue per unit of $1,202 in the third quarter.

Automotive News | October 15, 2014 - 12:01 am EST

Lithia Motors Inc. expects its average F&I revenue per vehicle retailed to stay flat through the rest of 2014 and 2015, at the current level of about $1,200 on a same-store basis.

Lithia, in a statement Monday, said it expects same-store average F&I revenue per unit of $1,202 in the third quarter, a rise of about 8.7 percent over the year-earlier period. The increase is higher than expected, the company said.

Lithia is scheduled to report complete third-quarter financial results on Oct. 30. The company said the estimates released on Monday were “preliminary.”

To put the forecast in context, Lithia’s average F&I revenue per unit was $1,206 for the second quarter of 2014. That was below an average of $1,279 in the quarter for the six largest publicly traded new-vehicle retailers.

Group 1 Automotive Inc. was No. 1 in the second quarter, with an average of $1,442. However, Lithia had the largest percentage increase in the quarter year over year, at 9.4 percent.

Lithia CFO Chris Holzshu said in July the company wants to improve its average F&I revenue per vehicle retailed by working on underperforming dealerships. If Lithia can improve F&I results at underperforming dealerships in the remaining months of 2014 and into 2015, the company’s latest forecast for average F&I revenue per vehicle could turn out to be a conservative one.

The company reported in July that in the second quarter average sales penetration was up for extended service contracts and for lifetime oil and filter policies.

“We have a list of 20, 25 stores that we’re focused in on and have opportunity,” Holzshu said at the time. “And we’re working to improve overall F&I PVR in those stores, which will bring up that $1,200, hopefully, to $1,250 and to $1,300. That’s something that we’re actively working on.”

Lithia Motors, of Medford, Ore., ranks No. 8 on the Automotive News list of the top 125 dealership groups based in the U.S., with retail sales of 67,177 new vehicles in 2013.

Group 1 Automotive, of Houston, ranks No. 3 on the list with retail sales of 155,866 new vehicles in 2013. Sales figures include data for dealerships outside the U.S.

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