Part 3/7:
The Real Profit Centers for Dealerships
Marco dispels common myths about car dealerships, pointing out that while new car sales make up 58% of dealership sales, they only account for 26% of gross profit. This statistic should be eye-opening for potential buyers; the real money lies in the F&I (Finance and Insurance) department, which covers extended warranties, service contracts, and other high-margin products that often go unnoticed.
According to Marco, these extended warranties have a staggering statistic: 55% of them go unused. Interestingly, this gives dealerships an advantage similar to that of a casino, in which they earn a guaranteed profit from products that many customers may not fully understand or utilize.