New light-vehicle sales remained at September levels in the fourth quarter of 2020, averaging 16.1 million units a month. November 2020 was the first month SAAR did not increase since bottoming out at 8.6 million units in April.
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. Public dealerships have demonstrated a continued focus on improving F&I product penetration to bolster profitability.
New vehicle F&I penetration continued to grow in the fourth quarter of 2020, reaching 82.9%, a 4.6% increase year over year.
M&A Activity remains strong. M&A activity continues, with nine transactions in the fourth quarter of 2020.
Colonnade Securities LLC (“Colonnade”) released a quarterly update on F&I Products for Q4 2020. The report can be accessed here.
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