2009 Finance Survey Results

Overall, most of the dealers who completed the 2009 Auto Finance Survey are averaging fewer than 150 sales per month. The vast majority of responding independents (65.3 percent) are selling fewer than 50 units per month.

When asked to compare their SF sales volume from the prior 90 days to the same period in 2008, 25.6 percent of franchise dealers and 32.7 percent of independents said their volume stayed about the same. While 54.7 percent of franchise dealers said their SF sales were worse or much worse for the 90 days prior to completing the survey compared to the same period in 2008, 36.5 percent of independents said it was worse or much worse. The findings weren’t all bad, though; 16.3 percent of franchise dealers and 23.1 percent of independents reported their past-90-day SF sales volume was better or much better. Some dealers didn’t have a means for comparison, as they weren’t doing SF in 2008; almost 8 percent of franchise dealers and 3.5 percent of independents fell into this category.

As can be expected, franchise dealers have access to more finance companies than independents do. About 47 percent of responding franchise dealers have six or more SF companies available to them, while only about 26 percent of independents have six or more SF companies available to them. The majority of responding independents (almost 67 percent) have access to one to five SF sources. Of the dealers who completed the survey, 7.1 percent of franchise dealers and 7.8 percent of independents reported not having access to any SF sources.

To submit deals, the majority of responding dealers are electronically submitting applications through DealerTrack, RouteOne, CUDL and Finance Express. DealerTrack is used by 94 percent of franchise dealers  and it’s used by 75 percent of independents both of which submit the majority of their applications through this process. RouteOne is used by 68 percent of franchise dealers and it’s used by 20 percent of independents.

CUDL, which was added to the list of providers this year, is used by equally by both franchise and independent dealers (32 percent of each). Finance Express is used by 2 percent of franchise dealers and 6 percent of independents.

In the F&I offices of franchise dealers, product penetration for new vehicle service contracts (39 percent), used vehicle service contracts (45 percent), SF service contracts (43 percent), and life and disability insurance (8 percent ) all increased over 2008 survey results. Penetration for GAP (43 percent) and the “other F&I products” category (27 percen) decreased by a few percentage points.

For independents, SF service contracts (33 percent) and life and disability insurance (2 percent) saw slight decreases in product penetration, and the GAP (39 percent) and “other F&I products” (17 percent) categories saw increases of 5 and 6 percent, respectively. The used vehicle service contract category held steady at 39 percent penetration.

When it comes to presenting F&I products to customers, most franchise dealers (81 percent) are still using menu presentations.

As in the past, a relatively small percentage of independents are presenting F&I products with a menu when compared to their franchise counterparts, but the percentage of independents using menus has increased from 21 percent in 2008 to 26 percent in 2009.

The survey reports some surprising results when examining the average F&I income per vehicle sold in the franchise dealer category. With tightening lending practices, particularly lower advances from many finance companies, it wouldn’t have been surprising to see a drop in average F&I income per vehicle sold from both franchise and independent dealers. Franchise dealers reported earning $42 less in F&I income per vehicle sold in 2009, while independents reported a $138 decrease.

More survey results were published in the November digital issue of Auto Dealer Monthly