As dealerships and finance companies were looking to wrap up a treat-filled October, JM&A Group released its Automotive Trends Report for the third quarter, reviewing data from more than 2,000 dealerships and outlining top trends connected with F&I product penetrations, PVR, deal mix and more.

“The third quarter of 2026 reinforced the value of a strong F&I strategy,” JM&A Group said in the report. “While front-end PVR softened slightly, F&I PVR and product penetration improved year-over-year, helping dealers offset margin pressure.

“At the same time, affordability challenges and negative equity continued to influence buyer behavior, making it more important than ever for dealerships to maximize every retail opportunity,” JM&A Group continued.

A couple of the major findings included:

—Average F&I PVR continued to be driven primarily by product income, which represented 61.7% of PVR, compared to 38.3% from finance reserve. Product income’s share increased 0.3 percentage points from Q3 of last year.

—GAP penetration remained ahead year-over year despite slight declines in July and August.

“Although monthly payments remain a primary affordability concern, ownership costs extend well beyond the initial purchase. Products such as VSC and GAP can help consumers manage unexpected expenses, reduce financial risk and protect their investment over time,” JM&A Group said.

As will be discussed during Used Car Week that begins on Nov. 16 in San Diego, JM&A Group reiterated affordability pressure is reshaping consumer behavior.

JM&A Group explained in the report that higher insurance premiums, maintenance expenses, and monthly payments are prompting some buyers to extend loan terms, choose less expensive vehicles, or delay purchases altogether.

For context, in July, insurance costs increased 18% from the year prior, JM&A Group said.

“As affordability becomes a bigger concern, customers are looking more closely at the entire cost of owning a vehicle, not just the purchase price. More than ever, buyers want reassurance that they’re making a smart financial decision,” said Alex Soto, who is director of dealer performance with JM&A Group.

“Dealers who take the time to understand what matters to the customer, communicate value, and offer solutions that make ownership costs more predictable put themselves in a great position to earn the business,” Soto continued.

JM&A Group vice president of sales Beau Jarrett added, “We’re bullish on the second half of the year. Service contracts will continue to be the most important product in F&I.”

JM&A Group closed its report by discussing interest-rate deductions.

In September, the IRS and the Treasury Department published a 31-page document in the Federal Register, detailing regulations that go into effect on Nov. 9 regarding the deduction for certain taxpayers for an amount up to $10,000 of qualified passenger vehicle loan interest.

“While elevated interest rates continue to weigh on vehicle affordability, the federal car loan interest deduction offers a new incentive for eligible buyers. However, the policy’s impact may be limited, as interest tied to negative equity does not qualify for the deduction despite negative equity affecting nearly 30% of new-vehicle buyer,” JM&A Group said in its report.

“Dealers, does your team know which vehicles are eligible for this deduction? Are they equipped to discuss the opportunity with customers in a compliant manner? For example, teams should know how to identify vehicles with U.S. final assembly and understand that interest attributable to rolled negative equity does not qualify,” JM&A Group continued.

“Interest on certain financed F&I products may qualify, depending on the customer’s individual circumstances. Dealers should consult their own legal, tax, and compliance advisors regarding implementation, and customers should consult their personal tax advisors regarding eligibility and tax treatment,” JM&A Group went on to say.

JM&A Group noted that report data reflects only dealers currently offering JM&A products and is not representative of nationwide dealer performance.

“Economic insights are not real-time and are generally updated quarterly. Projections involve assumptions and uncertainties and are not guarantees of future results and actual outcomes may differ materially. The content is provided for informational purposes only, does not constitute legal, financial, or compliance advice, and should not be relied upon without independent professional review,” JM&A Group said.