The direct-to-consumer market for vehicle service contracts (VSCs) is the fastest-growing segment of the $97 billion automotive F&I industry, growing at 12.3% compared to 3.6% for the total industry. The market opportunity is significant as 55% of vehicles on the road under 16 years old do not have a VSC. This sector will experience heightened M&A over the next five years. The macro fundamentals are compelling, and the industry demonstrates high margins, strong cash flow, fragmentation, and significant growth.  … [Read more...]

The landscape of the Auto Dealership Industry is in the midst of seismic changes. The relationships with the OEMs and consumers are evolving at a rapid pace and the long-term players will need to invest to stay relevant to their suppliers and customers. Affordability and supply chain challenges also seem likely to remain in the center of the conversation around car sales for the foreseeable future. For those operators who are skeptical of their long-term position, there may be no better time to consider an exit as capital remains robust and many large players are committed to expanding their footprints through acquisitions to achieve their lofty growth objectives. … [Read more...]

Automotive reconditioning is the process of preparing a vehicle at a dealership to be retail-ready. All new and used cars go through reconditioning before being put on the dealership lot. Services include wheel repair, exterior repair, paint, paintless dent repair (PDR), interior restoration, and detailing services. Many dealerships outsource reconditioning to optimize operations and decrease inventory turn-times. … [Read more...]

The current pandemic has sent the automotive industry and other large segments of the economy into a period of turmoil and uncertainty. Economic recovery could be slow, and new car sales are forecast to decline by 26% in 2020. Certain services segments of the automotive industry, such as auto inspection and warranty claims management, however, may be insulated from a broad recession. As the economy gets back to work, the frequency of motor vehicle accidents will rise, and mechanical breakdowns will return to pre-crisis levels. … [Read more...]

The vehicle service contract (VSC) industry continues to attract significant interest among investors and consolidators. Macro fundamentals are compelling, and the industry demonstrates growth, strong margins, and recurring cash flow. The industry value chain includes administrators, F&I agencies, direct-to-consumer marketers, payment plan providers, and specialty insurance carriers. In 2018, the industry was $35 billion at retail with significant opportunity for growth; there were 132 million vehicles that did not have a VSC but were eligible. Since 2010, more than 60 companies in the VSC industry have changed ownership. … [Read more...]

The vehicle service contract (VSC) industry continues to attract significant interest among investors. Macro fundamentals are compelling, and the industry demonstrates growth, strong margins, and recurring cash flow. The industry value chain includes administrators, F&I agencies, direct-to-consumer marketers, payment plan providers, and specialty insurance carriers. The industry totals $33 billion at retail and comprises a large and important component of automotive sales and profitability. Since 2010, more than 40 companies in the VSC industry have changed ownership, and we expect sellers to continue to benefit from strong demand among financial investors and strategic buyers for … [Read more...]

The F&I products industry is attracting significant interest as the macro drivers are compelling and the industry demonstrates high growth and margins. The F&I products industry totals $77 billion at retail and comprises a significant and valuable part of the U.S. automotive industry. The value chain includes administrators, F&I agencies, direct-to-consumer marketers, payment plan providers, and specialty insurance carriers. Since 2011, more than 30 companies in the F&I products industry have changed ownership, and we expect sellers to continue to benefit from strong demand among financial investors and strategic buyers for well-run businesses in the sector. … [Read more...]

The vehicle service contract (VSC) industry totals $29.4 billion at retail and comprises a large and important component of automotive F&I sales and profitability. The industry value chain includes direct-to-consumer marketers, auto dealers, administrators, payment plan providers, and specialty insurance carriers. This large group of firms provides many compelling investment opportunities. The industry has been growing and generates strong returns and earnings growth for investors. Recent M&A activity indicates strong investor demand. … [Read more...]

A rebounding automotive sector and a modest recovery of the U.S. economy have driven significant growth in the market for vehicle service contracts (aka extended warranties). … [Read more...]