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Author
Ben Jastatt
Sr. Director, Marketing
After the low-point of 2023 and steady recovery in 2024, the embedded auto insurance market is gaining strong momentum in 2025.
We measure this growth by tracking buyer intent at the dealership, overall policy purchases, and then adjust for customer mix and insurer appetite for new business.
By that measure, the opportunity has nearly tripled since its lowest point in late 2023.
As more insurance companies return to the market and loosen their underwriting criteria, more buyers are finding affordable insurance options at the point of sale.
For dealers, this trend is highly encouraging: more insurance options for customers often translates into customer savings in the dealership and even more closed deals. That can lead to higher F&I gross. This effect is covered later in the report with an analysis of our top 10 most engaged dealerships.
In 2025, the embedded opportunity continues to accelerate. And for dealers already leaning in, the results are clear.
21% Higher F&I Gross Profit with Insurance Quotes
Dealerships that consistently engaged car buyers in the insurance quoting process saw a significant lift in profit.
Among our top 10 most engaged dealer partners, the average F&I gross was 21% higher when customers merely saw insurance quotes (without even purchasing insurance). That simple action translated into an average increase of $320 higher F&I gross profit per deal.
But the impact doesn’t stop at quoting. When customers actually purchased a policy, they saw an even greater improvement to F&I gross of 28% or $432 per deal.
These findings reinforce a clear trend: integrating insurance into the car-buying experience not only enhances customer value, but it also directly increases dealership profitability. Whether customers save or not, offering embedded insurance drives higher trust, stronger engagement, and more room to maximize F&I opportunities.
Insurance and F&I Gross Across Top 10 Dealerships
In Q1, all of Polly’s top ten most engaged dealer groups* continued to see higher back-end gross with insurance, for the fifth straight quarter, we’ve reported on this metric. This graph includes a blended average of F&I gross for customers who received quotes but didn’t buy insurance as well as customers who bought insurance.
Why Insurance Quoting Matters So Much
F&I gross profit is now two times higher than front-end gross.
Front-end gross fell under $1,000 ($970 actual) in Q1, down 30% year over year. However, F&I gross profit has remained consistent over the last two years, coming in at $1,839 for Q1.
With front-end gross compressing, the F&I office has become the last stronghold of dealership profit.
As dealers rely more heavily on back-end products, embedded insurance can help them maintain F&I profitability.
Average F&I Gross Profit Q1 2025
$1,839
Insurance Rates Ease in Q1 2025 to an Average of $195 per Month
$195 Average Monthly Polly Insurance Quote for Car Buyers
After a long period of steep insurance increases, auto insurance prices started to cool in Q1 2025. Polly’s findings matched the overall consumer price index which showed an 0.8% drop month over month for the end of March.*
The median monthly Polly insurance quote for car buyers shopping in-dealership dropped to $195, a slight decline from the Q4 2024 high of $202.
For dealers and their customers, that’s good news, especially in a market where affordability can make or break a deal.
Insurance Market Friction Decreases
Many car buyers faced limited or high-cost insurance options in 2023 and 2024, but the market has shown a sustained return to healthier dynamics.
As of early 2025, fewer buyers are encountering barriers, and 19 out of 20 are seeing highly competitive quotes.
This recovery follows a peak in late 2023 when more than 1 in 6 buyers experienced high-friction conditions. Since then, quote availability has steadily improved, suggesting insurer appetite is returning and market conditions are stabilizing.
Percent of buyers who were either uninsurable, had high insurance (more than 2X monthly average), or faced conditions where insurance companies pulled back from taking on new customers in their states.
