While advocacy groups and federal regulators continue to be skeptical of the convenience and value dealers present at the F&I office, new data from Edmunds.com is showing the volume of work completed in that store department is climbing to levels never previously seen.

Edmunds.com determined only about 23 percent of buyers in July completed a purchase either with cash or financing arranged on their own as opposed to the remaining 77 percent that included some kind of indirect financing orchestrated at the dealership.

Analysts indicated last month’s trend is on track to be the lowest level ever, and down from about 35 percent just five years ago.

"You can't underestimate how important dealer financing has been to this automotive recovery,” Edmunds.com senior analyst Jessica Caldwell said.

The latest auto loan figures back up Caldwell’s declaration. As previously reported here by SubPrime Auto Finance News, Equifax computed that the total outstanding auto loan balance as of June topped $900 billion for the first time.

“What’s great is we continue to see the momentum. Each month, we continue to see it grow and get stronger. It’s a really positive sign for the car market in general. Growing balances will continue to feed healthy growth for the next three to five years,” said Jennifer Reid, the senior director of product marketing at Equifax Automotive Services.

That growth expectation now and down the line isn’t just coming from prime borrowers, either. CNW Research pointed out that the number of subprime buyers in July rose by a “substantial” amount. CNW pinpointed the jump at 25.5 percent versus the same month a year ago.

And growth in deep subprime — borrowers with credit bureau scores below 550 — expanded by nearly the same rate in July, too. CNW indicated the amount of deep subprime borrowers climbed by 23.6 percent year-over-year.

Perhaps at least aiding in that growth — and aiding in profits for both the dealer and finance company — is the work being completed in the F&I office.

“When you think about more than three-quarters of people are at the dealership getting some sort of financial package, it just seems it’s totally changed from the mindset of a long time ago where you saved money and put down a big down payment,” Caldwell said.

“It seems like there are so many people who buy on monthly payment that the dealer works out for them, whether it’s a lease or financing,” she continued. “People just work within their budget saying, ‘OK, that monthly payment works for me.’ That’s why you see so much happen at the dealership rather people checking their own bank or credit union, thinking about how much they can afford before going into the dealership.

“I think (completing financing at the dealership) is a convenience factor, but I also think it’s also sometimes what drives the purchase decision. Some of these offers are so great whether it’s leasing or financing. It can really make or break the deal. Not only is it a matter of convenience, getting your transaction done all in one place, it’s also financially advantageous for people,” Caldwell went on to say.