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This excerpt taken from the AN 10-K filed Feb 28, 2007. Finance
and Insurance
Reported finance and insurance revenue and gross profit
benefited from the impact of acquisitions when compared to same
store performance.
During 2006, same store finance and insurance revenue and gross
profit benefited from increased retrospective commissions
received on extended service contracts, as well as higher new
and used vehicle prices and increased premium luxury revenue per
vehicle retailed. Improvements were also driven by our continued
emphasis on training and certification of store associates,
particularly in third and fourth quartile stores, and on
maximizing our preferred lender relationships.
Finance and insurance revenue and gross profit increased
slightly in 2005 compared to 2004. The improvement was driven by
increased retrospective commissions received on extended service
contracts partially offset by decreased new and used vehicle
sales, which were caused in part due to the effects of Hurricane
Wilma on our Florida stores. Improvements were also driven by
our continued emphasis on training store associates.
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This excerpt taken from the AN 10-K filed Feb 24, 2005. Finance and Insurance
Reported finance and insurance revenue and gross profit for 2004 benefited from the impact of acquisitions when compared to same store performance. Same store finance and insurance revenue and gross profit increased for 2004 due to increased vehicle revenue, product penetration and retrospective commissions received on extended warranties. Additionally, our improvement has been driven by our ongoing concentration on our fourth quartile stores and our transparent sales process that is supported by the “AutoNation Pledge.” The “AutoNation Pledge” is our commitment to provide our customers with disclosures relating to the finance and insurance sales process. Finance and insurance revenue and gross profit were also impacted by the effect of the four major hurricanes on our stores in Florida and the Southeast during the third quarter of 2004. During the fourth quarter of 2004, we saw improvements in these markets driven by post-hurricane demand and a stronger local economy. Substantially higher interest rates in the future may negatively impact finance and insurance revenue and gross profit. Finance and insurance revenue and gross profit increased in 2003 primarily due to increased product penetration as a result of the continued usage of our menu-based finance and insurance sales process. During 2003, we focused on our underperforming fourth quartile stores and provided intensive, ongoing training of finance and insurance associates in all of our stores. In the fourth quarter of 2003, we also substantially completed the transition to manufacturer extended warranty programs and expanded our lender network to include prime and non-prime lenders. In addition, lower interest rates facilitated finance and insurance sales. 28
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