As the RV market shifts and dealership margins tighten, one department remains a driving force behind profitability: Finance & Insurance, also known as the Business Office, the Box or just F&I.
The numbers do not lie. Our data shows that without F&I sales and profits, many dealerships today would struggle to stay in the black.
Margins on RV unit sales are shrinking, and the F&I department is becoming increasingly important to the bottom line. Many dealers will make more profits per deal on the back end with F&I sales and contracts than they will on the front end.
In 2024, the average front-end gross profit per retail deal was just over $2,800. Average F&I profits totaled $4,000 per deal.
The opportunity for additional F&I income has never been higher.
Over the past five years, the percentage of customers using dealer financing has steadily increased.
The average finance penetration from 2015 through 2020 was about 55%. Since 2020, finance penetration has increased to 62% of all deals in 2024. This year, finance penetration rose to 64% of all RV sales. The steady climb demonstrates a shift in consumer behavior and an increasing trust in dealership financing options.
Why is Finance Penetration Important?
As you may already know, the F&I profits generated on a cash sale (or outside financed sale) are considerably less than deals where the dealer arranges the financing.
The difference is not just the finance reserve or the portion of the finance charges a dealer earns for completing the retail installment contract. The difference also includes the opportunity to sell ancillary products, such as extended service contracts, guaranteed asset protection (GAP), and paint and fabric protection.
For example, extended service contracts were sold on 37% of the deals financed by the dealership this year, compared with just 10% of the cash deals.
Let’s break it down to see the Power of Finance Penetration:
- The average dealership finance penetration keeps increasing: 55% (2015-2020) –> 62% (2024) –> 64% (2025 YTD)
- More financing equals greater opportunities for ancillary product sales
- Cash sales generate significantly lower F&I profits
Product Sales are Half the Battle
Ancillary product sales account for nearly half of dealers’ F&I income. Yet look at the opportunities that remain for dealers to continue increasing F&I sales.
Extended service contracts are the top products, with a penetration rate of 27%.
GAP coverage is next at 26%, followed by paint and fabric coverage at 12%.
Tire and wheel coverage and roadside assistance tie at 8%.
All other products combined have a penetration of less than 2%.
There is little wonder why large dealer chains with centralized finance offices are seeking increased F&I sales. If a dealership attached extended service contracts to 40% of RV sales instead of 27%, how much would the bottom line grow? If roadside assistance contracts comprised 15% of RV sales instead of 8%, how much is that worth to your bottom line?
Motorized vs. Towables
The percentage of towable RVs financed at the dealership is higher than motorized RVs, 66% vs. 56%, respectively. Towable RVs make up about 85% of all RVs sold in the U.S.
The average F&I income produced on towable RVs as a percentage of the sale price is higher than motorized RVs—9% vs. 6%. However, because towables’ average sales price is $40,000, compared with motorized RVs’ average sales price of $126,000, the average F&I income on towable RVs is almost half that of motorized.
So far this year, the average F&I income produced on motorized RVs is $7,500 per RV delivered. The average income produced on towable RVs is $3,500 per unit delivered.
Product sales are about the same for each, with extended service contracts dropping by a couple of points for motorized RVs. Paint and fabric protection, tire and wheel coverage and roadside assistance contacts all have increased penetration percentages on motorized RVs.
New vs. Used
New RVs, including motorized and towables, are significantly more likely to be financed at the dealership than used RVs.
Of all new RVs delivered this year, 71% were financed at the dealership. Among used RVs, only 53% were financed at the dealership.
With a reduction in finance penetration is reduced product penetration across the board. The result is an overall reduced average income per RV.
So far this year, the average
F&I profit for used units is $2,800.
The average F&I profit on new RVs is over $4,800.
The bottom line?
There is no mistaking the message in these figures: the F&I department has evolved beyond a mere add-on for RV dealerships. Today, F&I sales are a critical component of dealers’ financial success.
With more customers choosing dealership financing and the significant revenue generated from ancillary products, dealerships strategically focusing on their finance operations are poised to see substantial benefits.
To stay ahead in 2025 and beyond, dealers must encourage financing and optimize their F&I sales strategy. By doing so, they will ensure customers see the value in ancillary products that protect their investment.
Don Miller is a senior data consultant at Constellation Dealer Group. With more than 30 years of experience in the industry, Miller provides training, consulting and analytical services to dealerships.
