F&I Industry Insights and Implications for Administrators and Agencies

 📈 Key Trends from Q3 2024:

• Expansion of the Sweet Spot: Vehicles in the F&I “sweet spot” (6–12 years old) now represent 36.2% of all vehicles in operation, growing by 2.3% year-over-year. This expanding market highlights opportunities for administrators to tailor offerings that meet the needs of longer ownership cycles​.
• M&A Activity in Focus: The industry has seen robust consolidation, with major acquisitions like Hellman & Friedman’s purchase of Safe-Guard Products and APCO Holdings’ acquisition of Rider’s Advantage. These deals emphasize the growing demand for scale and innovation among F&I administrators​.
• Resilience of F&I Income: While dealership front-end profits have declined, F&I products like vehicle service contracts (VSCs) and GAP insurance are stepping in to fill the gap. This underscores the importance of administrators in delivering high-value products that enhance dealership profitability while supporting consumer confidence​​.
• Consumer Shifts: Product attachment rates reached new highs in Q3 as affordability concerns drive demand for service contracts and financial protections. Agencies and administrators are uniquely positioned to innovate around these needs.

What It Means for Administrators and Agencies:
As the market evolves, F&I administrators and agencies must continue to differentiate themselves through product innovation, operational efficiency, and alignment with dealership priorities. Consolidation trends also point to the need for strong partnerships and scalable platforms that can weather industry shifts.

The data from Q3 paints a clear picture: now is the time to invest in capabilities that meet the changing demands of both dealerships and consumers. Whether it’s through digital tools, streamlined processes, or new product designs, administrators and agencies have an opportunity to drive meaningful impact in this dynamic environment.

🔑 At Colonnade Advisors,we are the leading experts in guiding businesses through M&A and capital raising within the F&I space. With over two decades of experience, we help maximize value for business owners.