Brian Brueggeman, partner for Oak Brook, Ill., accounting firm Crowe LLP, told Automotive News most of his company’s clients expect F&I sales to drop about 7 to 12 percent this year. The increase in all-cash car purchases, rising interest rates and lower discretionary income all could contribute to lower F&I profits in 2023, he said.
Brueggeman points to a EV buyers as a potential growth market for F&I sales.
“I think people probably will want to buy F&I products on EVs just given the fact they’re so new. And when something goes wrong on an EV they are very expensive to fix, especially on the battery side of things,” he said. “It’s just making sure and understanding what those F&I products are because it definitely is a little bit different on the EV than a traditional internal combustion engine. The battery makes the car weigh a lot more, so there’s more wear and tear on the tires, etc. So I think there will be a different shift on the F&I products, but I do think people will definitely purchase more and more products.”
Brueggeman noted even though there may be a decrease in F&I per vehicle sold in 2023, if more vehicles are sold this year compared with 2022, dealers may be able to make more F&I profits just by selling more vehicles.
