FORT LAUDERDALE, Fla. — In what was a solid all-around year for AutoNation, the F&I department at its dealerships were humming along at an impressive clip, as well.

The retailer has continued to boast strong F&I operations thanks largely to "better execution" and the value-centric process AutoNation has put into place when it comes to selling such products, says president and chief operating officer Mike Maroone.

Overall, net F&I revenue soared more than 20 percent for AutoNation in 2012, and the retailer was pulling in gross F&I profit of $1,273 on each unit retailed, which marked a 6-percent gain, the company said in its full-year and fourth-quarter earnings report released last week.

Full-year net F&I revenue was at $571.2 million, compared to $474.5 million in 2011.

The retailer capped 2012 with a 19.2-percent increase in F&I revenue generated in the last quarter of the year, generating $148.9 million.

And F&I gross profit per unit retailed came in at $1,307 during the fourth quarter, up $84 from the same period of 2011.

During last week's earnings conference call with analysts, Maroone addressed a question about the impetus for continued strength in the F&I department, and what potential it holds for the future.

"First of all, I'm thrilled with our F&I team. We've led the industry of all the people reporting publicly for quite some time, and have gotten a lot better. Up $84 year-over-year in the quarter, which is a huge increase," Maroone said, referring to the aforementioned fourth-quarter gain in F&I gross profit per unit.

"There is no new products; what there is, is better and better execution. We really look at the bandwidth of performance in our stores," he continued. "We've got an intense training and certification program, and a real focus on selling extended service contracts, which creates a much greater linkage to our stores and will help drive that customer care volume up."

Also pushing the F&I gains have been the AutoNation Pledge, which was introduced almost nine years ago. In the July 29, 2004 press release announcing the launch, AutoNation said the pledge is "a document that explains certain rights
customers have during the vehicle financing process and clearly states the
company's commitment to them."

This pledge, Maroone said during last week's call, "really starts by letting consumers know that they're not forced to buy products."

He continued: "It's not a high-pressure process. It's a very methodical process that really puts the customer first, and puts the value on these service contracts and pre-paid maintenance products.

"We don't want to drive our F&I by pushing rates up; we really want to do it with value-added products. It's just a continual improvement process and a tightening of the bandwidth."

Looking forward, Maroone declined to speculate on the heights F&I can potentially reach, but did provide a little insight on the company's expectations.

"I will say that we're forecasting continued growth in F&I PBR," he said. "It's a very important part of our strategy."

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