New light vehicle sales increased 12% in the first quarter of 2021 compared to last year. The SAAR for the first quarter of 2021 returned to 2019 levels, driven by a 13% increase in March 2021. March 2021 light vehicle sales (SAAR) reached 18 million sales, the highest level since 2005.
Selling F&I products with new and used vehicles is a proven path to increasing dealer profits. Dealers earn roughly $2,200 on the sale of a new vehicle itself. Dealers can earn another $1,200 on the sale of a vehicle service contract (VSC) or other F&I products, significantly boosting profitability. The six public dealership groups average $1,815 of F&I profit per vehicle on a same-store basis, a 7% increase from last year.
New vehicle F&I penetration continued to grow in the first quarter of 2021, reaching 94.7%, a 3.5% increase year over year. Used vehicle penetration increased 6.4% from last year to 82.9%.
M&A activity continues, with three transactions in the first quarter of 2021.
Colonnade Securities LLC (“Colonnade”) released a quarterly update on F&I Products for Q1 2021. The full report can be accessed here.