A finance and insurance manager at a Tennessee dealership says he has learned the two most powerful questions to ask customers are, "Which would you prefer?" and "Is that the way you want me to set it up?"

Those closers in the selling of F&I products, “work like a charm,” he says on a social media site called Ethical F&I Managers.

F&I revenues add a charm of their own to dealership bottom lines.

Lithia Motors, owner of 86 stores, reported a 38.2% jump in F&I business in the first quarter of 2011, as its gross profit on finance and insurance rose to $980 per unit.

Contributing to the F&I uptrend were increased sales by Lithia and other dealers in finance, service, warranty and credit-insurance contracts, says Lithia Chairman and CEO Sid DeBoer.

No.6 on this year’s Ward’s Dealer 500, Galpin Ford in North Hills, CA, raised its F&I revenues to $13 million in 2010, compared with $9.95 million the year before.

Owner Bert Boeckmann credits “a stellar lineup” of Ford vehicles, a “solid” captive lender (Ford Credit) and effective advertising.

“F&I always has been a winner for Galpin,” Boeckmann says. “We've concentrated on F&I business when times were good and bad, and it has paid off time after time in customer satisfaction and loyalty. A satisfied customer is one who stays a Ford owner and likes his or her cars fully equipped and insured.”

A publicly owned dealer group boasting an F&I increase is Asbury Automotive, based in the Atlanta suburb of Duluth, GA. The 84-store chain increased its F&I revenues to $116.4 million in 2010, up about $26 million from 2009.

F&I accounts for nearly 20% of Asbury’s total gross profit. CEO Craig T. Monaghan and predecessor Charles Oglesby have overseen a sharp escalation in the F&I side of the dealership chain’s operations.

Monaghan says Asbury’s highest F&I profit and revenue producers are extended-service contracts, gap insurance and prepaid maintenance programs covering oil changes, cleaning and adjusting of brakes, multi-point vehicle inspections and tire rotations or replacements.

Asbury uses its economies of scale to offer “discounted pricing on many of the service contracts we provide,” Monaghan says. “These discounts apply to insurance and maintenance products, as well.”

Asbury, despite a decrease in total revenues in 2010, managed to show a yield of $1,100 per unit in F&I. The services accounted for 18% of Asbury's gross profit in 2010.

Another dealership group, Penske Automotive, weighed in with a first-quarter F&I gross profit of $949 per vehicle sold.

Dealership F&I income jumped 15% last year, according to the National Automobile Dealers Assn. Service-contract penetration rose from 37% in 2009 to 39% last year.

“F&I income and profits offset dealers’ average net loss of $180 overall per new vehicle retailed,” says NADA Chief Economist Paul Taylor.

The Ward’s Dealer 500 has strong F&I showings across the list. Profits per vehicle retailed range from $573 to $1,378. No year-to-year losses are reflected in the list’s F&I column.

Ed Bozarth, No.91 on the Ward’s Megadealer 100 with five Chevrolet dealerships, is a perennial leader in the F&I revenue segment, with a $1,280 per-vehicle average in 2010. The head of Ed Bozarth #1 Chevrolet also maintains a 130% customer-satisfaction index score.

He foresees increasing per-vehicle F&I revenues to $1,500 this year.

Other per-vehicle F&I revenue standouts are Capital Toyota, San Jose, CA ($1,378); BMW & Mini of Nashville, TN ($909); and Mercedes-Benz of Nanuet, NY ($804).

With Steve Finlay