F&I Reaches for the Sky
The increasingly important profit center continued making gains in the first quarter, according to StoneEagle data, ancillary products proving more popular as consumers hold onto their buys longer.
Ancillary F&I products are gaining more traction with consumers, reaching as high as a 20% penetration rate for paint-and-fabric protection in the first quarter.
Pexels/Luke Miller
Auto dealers’ finance-and-insurance revenue is becoming more crucial to shoring up profits as the market normalizes from pandemic-era peaks.
A first-quarter StoneEagle report shows solid growth in F&I sales as consumers strapped by overall inflation see the need to protect the vehicles they keep longer nowadays.
F&I per-vehicle retail in the quarter jumped about 8% to $1,986, based on anonymized data StoneEagle compiled from products used by its customer base, which it said represents more than half the U.S. auto retail industry. That translates to about a 3% year-over-year jump in average F&I revenue per dealer to more than $211,000.
Products per deal, meanwhile, rose about 2% to 1.6.
The only F&I metric to show a decline in the quarter was average deal count per dealer, which fell about 4.5% to 106, StoneEagle said, citing normalization from last year’s first-quarter shopping surge when consumers sought to beat trade tariff inflation.
“Even with fewer deals moving through the average dealership, F&I income still increased year over year as dealers relied more heavily on F&I to help balance affordability pressure and lower front-end gross, reinforcing F&I’s role as the foundation of stability and profitability for dealerships,” “said StoneEagle CEO Cindy Allen.
Though average dealer front-end profit per deal is down by more than half from Covid-era highs and by 21% from January 2025, that’s still about a third higher than before the pandemic, StoneEagle reported.
Ancillary F&I products are gaining more traction with consumers, reaching as high as a 20% penetration rate for paint-and-fabric protection, 75% above 2020’s level, according to the report.
Vehicle service contracts and gap protection still sell the most, VSCs gaining to a 45% penetration rate in the quarter and gap rising to 40%.
“As consumers finance larger balances across longer ownership cycles, products tied to vehicle protection and negative-equity exposure are becoming a more important part of the F&I conversation,” said StoneEagle Chief Product Officer Colin Snyder.
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