U.S. Franchised Dealers' F&I Revenue Hits Record High: $1,769 per Vehicle

Finance and insurance (F&I) revenue at U.S. franchised automotive dealerships reached a record high in Q2 2026, generating $1,769 per retail vehicle — up 4.8% year-on-year and the highest quarterly level ever recorded. This growth effectively offset persistent margin pressure on new and used vehicle sales, according to the Q2 2026 Franchised Dealer Average Operating Performance Benchmark Report, jointly released by Presidio and NCM Associates.

The report notes that F&I revenue is the only one of the three per-vehicle metrics tracked in the benchmark to post year-on-year growth; by contrast, new-vehicle gross profit per unit fell 13.5% to $1,840, while used-vehicle gross profit dropped 10% to $1,409. Jason Stein, Managing Director at Presidio, stated during the report's webinar briefing: "F&I has evolved beyond being just a 'stabilizer' — this quarter, it became a critical pillar of the profit structure."

Notably, this F&I revenue increase stemmed primarily from higher average transaction prices, rather than solely from improved product penetration rates or upgraded product mix. Kevin Tynan, Presidio's Research Director, emphasized that F&I is inherently a "high-margin, high-growth" segment; relying on it reasonably does not signal risk — and is in fact preferable to the unsustainable front-end windfalls seen during pandemic-era extreme inventory shortages.

Longer vehicle ownership cycles, increasingly expensive electronic systems, and larger-diameter wheels — all common upgrades — continue to amplify consumers' future repair-cost exposure, keeping F&I products like service contracts and wheel/tire protection highly relevant. Tynan noted that boosting F&I profitability doesn't necessarily require introducing complex new tools; instead, it hinges on strengthening frontline sales training — helping sales staff truly understand product logic, identify optimal recommendation timing, and convey value in tangible, relatable ways. Call recording reviews, scenario-based role-playing, and standardized scripting have proven highly effective.

Data shows customers currently purchase an average of ~1.6 F&I products per transaction, with each contributing $500–$1,000 in gross profit. Moreover, a healthy used-vehicle business not only lifts acquisition gross profit but also drives ongoing conversion into financing, extended warranty, and follow-up service customers.

Overall, dealership profitability remains in adjustment mode: average pre-tax profit declined 11.8% in Q2 2026 (vs. an unusually high 2025 base), though the rate of decline has stabilized. Stein views this as the first positive sign that profit realignment may be nearing stability. By brand segment, luxury-brand dealers saw pre-tax profit fall 13.3%, import-brand dealers down 5.6%, while domestic-brand dealers were nearly flat (-0.2%). After-sales and parts operations continued to anchor profits, accounting for 52.8% of total gross profit; fixed-operation gross profit rose 5.2% year-on-year. However, labor costs rose to 37.8% of gross profit, and advertising expenses increased 2.8% year-on-year to $406 per vehicle.