Clear definitions for the F&I terms that matter most to independent used car dealerships — from backend profit to reinsurance structures.
Add-on products sold after the vehicle sale, such as appearance packages, theft deterrents, and protective coatings.
Read Definition →Supplemental F&I products beyond VSCs and GAP, including tire-and-wheel, key replacement, and paintless dent repair.
Read Definition →Revenue earned from F&I products, finance reserve, and aftermarket items — everything beyond the vehicle sale price.
Read Definition →A dealership model where the dealer acts as both seller and lender, financing vehicles directly to the customer.
Read Definition →An offshore reinsurance entity owned by the dealer, used to capture underwriting profit with specific tax advantages.
Read Definition →Reversal of dealer commission when a customer cancels an F&I product or pays off a loan early.
Read Definition →Funds set aside within a reinsurance entity to cover future warranty or insurance claims on products sold.
Read Definition →The markup a dealer earns on the interest rate between what the lender approves and what the customer pays.
Read Definition →A domestic warranty company owned by the dealer that retains underwriting profit from F&I products sold.
Read Definition →A structured presentation tool used to offer F&I products to every customer in a consistent, compliant format.
Read Definition →The percentage of vehicle buyers who purchase a specific F&I product — a key metric for backend performance.
Read Definition →Guaranteed Asset Protection that covers the difference between what a customer owes and the vehicle’s actual cash value.
Read Definition →The ratio of claims paid out versus premiums collected — a critical measure of reinsurance profitability.
Read Definition →Average F&I income earned per vehicle sold — the primary benchmark for measuring F&I department performance.
Read Definition →A structure that lets dealers participate in the underwriting profit of the F&I products they sell, building long-term wealth.
Read Definition →A profit-sharing arrangement where dealers receive a portion of underwriting gains after claims are settled.
Read Definition →A GPS-enabled device that can remotely disable a vehicle’s starter, commonly used in BHPH and subprime lending.
Read Definition →Financing for borrowers with lower credit scores, often involving higher interest rates and specialized lender programs.
Read Definition →The profit remaining after claims and expenses are subtracted from premiums collected on F&I products.
Read Definition →An extended warranty covering vehicle repairs after the factory warranty expires — the highest-margin F&I product for most dealers.
Read Definition →See how much backend profit you’re leaving on the table — and how a transparent F&I partnership can change the math.