Issue No. 2 | April 14, 2026

Intelligence for F&I agents, administrators, and dealership finance professionals.

THE NUMBER: +$0.20-$0.40

Average U.S. gas prices have increased roughly $0.20–$0.40 per gallon following the Iran conflict, as oil markets reacted immediately to supply risk. For dealers, that shows up quickly in the vehicle purchase decision. As fuel costs rise, consumers reassess total cost of ownership — particularly on larger vehicles — and new car purchases get deferred. Fewer new vehicle purchases mean fewer F&I presentations at the desk.

That pressure is already visible, as declining consumer sentiment leads buyers to delay large purchases like vehicles.

THE F&I ANGLE

Fuel prices are hitting the F&I business from both sides.

On the front end: fewer new car purchases mean fewer F&I presentations. Consumers who defer buying hold their vehicles longer, which expands the pool of aging vehicles outside factory warranty windows. The 4–8 year old cohort — already the most receptive to VSC coverage — grows as people stay put rather than trade up.

On the back end: the same inflation pipeline suppressing new car purchases is increasing the cost of claims on protection products already in force. As energy and transport costs are already moving into parts and labor, claims get more expensive to settle. If those products were priced against a 2024 or early 2025 cost structure, the book may already be underpriced.

Annual actuarial reviews are typically nine months behind by the time they reach a desk. That means a review completed in late 2024 reflects a cost environment that no longer exists. If parts availability tightens, repairs turn into replacements — increasing severity independent of frequency.

Front end: fewer deals. Back end: higher exposure per deal.

FROM THE BLOG

The Iran conflict is moving through oil markets into parts prices, labor costs, and ultimately into the F&I loss ratio in a sequence that can be tracked. This week’s post breaks down that timeline and what it means for dealership F&I, reinsurance structures, and pricing strategy. Early data suggests effects are already materializing. March CPI rose 0.9%, the largest increase in nearly four years, driven primarily by a surge in gasoline prices. At the same time, consumer sentiment has dropped sharply, with the University of Michigan index falling to 47.6 in April from 53.3 in March, while one-year inflation expectations jumped to 4.8%, reflecting growing concern about rising costs and household financial strain.

THE DESK STAT

A transmission replacement that cost $3,500 a year ago may run $4,800 today. That’s the number for your next VSC conversation at the desk — and a signal of where repair cost inflation is taking the back book if pricing hasn’t followed. If your rates were built on 2024 claims data, they don’t reflect what it costs to settle that job today.

Until next Tuesday —

Contact me and tell me whether inflation is showing up in your claims data yet.