Dealer group JCT600 has attributed a record year for F&I to manufacturers increasing promotion of finance deals, as well as investment in staff, according to Simon Barrass, group F&I director.
The group, which operates 20 franchises in Yorkshire and the North East, is now making an average profit of £465 on F&I per vehicle sold, up 15% on the figure for 2009, but 17% on the dip of 2010.
Finance penetration for the year was 59% for new cars (up a percentage point from 2009) and 49% (up three points from 2009) for used cars while GAP penetration has returned to the 2009 figure of 60%. PCP penetration has steadily increased from 24% in 2009 to 30% in 2010 and 38% in 2011.
Theres a lack of consumer confidence, Barrass told delegates at the Finance and Leasing Association (FLA) 8th Annual Motor Finance Convention, but if you do your job right you can make some money and sell some cars.
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Barrass pointed to the expectation of the group to sell 20,000 units this year which, when multiplied by £465, accounted for a healthy amount of money.
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By GlobalDataTo this end, JCT600 has hired three F&I managers who Barrass believes are certainly increasing the amount of business and the amount of profitability.
A strong trend in such business has been the increase in carmakers involvement in finance arranged by the group.
Four years ago, Porsche would not do PCP, now its 70% of Porsches financed, said Barrass.
Across all brands sold by JCT600, finance volume placement has shifted from a near even split (of £124m of financing) between manufacturers and independents in 2005 to 89% / 11%, respectively, in 2011 (of £124m of financing in the year to date).
A lot of manufacturers have already bought the ticket on finance deals, said Barrass.
Its now a no-brainer. Less than one-in-10 deals Id go to an independent for instead of the manufacturer.
An extended analysis of JCT600’s ‘record year’ will be published in December’s issue of Motor Finance magazine.
richard.brown@vrlfinancialnews.com