A stronger retail market — and higher stakes for F&I
After several uneven years, retail vehicle demand has rebounded: multiple industry trackers show retail new-vehicle sales rising year-over-year through 2025 (for example, J.D. Power projected a ~7.8% increase in new-vehicle retail sales for August 2025 versus August 2024, and other industry trackers reported mid-single-digit retail growth in recent months).
That recovery is good news — but it raises the bar for dealership finance & insurance departments. F&I gross profits have climbed back toward historic highs, with industry reports noting gains in average F&I gross profit per vehicle in recent quarters. At the same time, customers are more digitally informed, compliance scrutiny has intensified, and dealers are expected to deliver faster, more transparent, tech-enabled F&I experiences. These trends mean F&I is no longer a back-office afterthought — it’s a core profit engine that must be modernized, measured, and managed.
New expectations for F&I — three things dealers must get right:
Technology + transparency — buyers expect a digital, seamless F&I presentation and clearer product value-explanations; dealers that adopt modern F&I platforms win higher penetration and better compliance.
Training & process discipline — effective, modern F&I selling requires continual training and consistent processes to protect margin while staying compliant.
Data & pricing agility — rising new-vehicle prices and shifting term/credit dynamics mean F&I pricing must be dynamic and driven by real data, not habit.
Why dealer reinsurance is showing up in more conversations
Dealer reinsurance lets a dealer capture more of the underwriting profit and investment income tied to F&I products by issuing or reinsuring certain warranties and protection plans through an affiliated reinsurance vehicle. Properly structured, it can improve underwriting economics, increase retained premium reserves, and give dealers more control over claims handling and product design — though it also brings regulatory, capital, and governance considerations that require specialist advice.
If your operation is seeing stronger retail traffic, now is the time to tighten F&I operations and evaluate whether a reinsurance structure (or improvements to your existing F&I program) could meaningfully improve cash flow and after-tax returns. Need help benchmarking your F&I PVR, designing a modern F&I presentation, or evaluating dealer reinsurance options? Advanced Dealer Solutions can run a complimentary diagnostics review and map practical next steps tailored to your showroom and goals.
—The Advanced Dealer Solutions Team
Please contact us if you or your team are unprepared or underserved. We promise the 15-minute conversation will be worth it!
Events we will be attending:
F&I Product & Reinsurance Conference
NADA 2026
