But I would say they are not hampered necessarily by that. But obviously, what we are focusing on is how we can densify our existing footprint to maximize the efficiency of our businesses and provide a complete range of services to customers that we have built up over the last two decades of being one of the most progressive automotive retailers in the country.Bret Jordan Okay. And then one last quick one, CIG was it incremental to F&I or was the volume relatively small and an offset to somebody else’s loan revenues?Mike Manley So firstly, we have – as we said, we are really aligning CIG’s growth in AutoNation finances growth alongside to AutoNation USA. And I can tell you they are integrated phenomenally. We are very pleased with that.
The model that we set up, frankly, was one where there was no right for business because what I didn’t want to do – what we didn’t want to do was just say, hey, we have got the finance company, now you have to use it, because I think they have to remain very competitive. They have to understand that there is no right to them getting the business for us. So, response times, look to book, all of the normal things you would expect. They have displaced some – obviously, that displaced volume because if you – our finance penetration, as Joe said, is broadly on new vehicles is the same. I will use that because it’s slightly down, as you may expect, because there has been some reduction in deep sub-prime and sub-prime. And so, they have displaced some volume with other providers.
But all-in-all, I think what we have got now is a great competitive marketplace, and they are a competing player in that.Bret Jordan Great. Thank you.Operator Thank you. We now have Adam Jonas of Morgan Stanley. Your line is now open.Adam Jonas Hey everybody. Hey Mike.Mike Manley Hey Adam. How are you?Adam Jonas Good morning. Thanks. I am good. Your comment about 45% of volume being done at MSRP and that being lower than others, I would just be curious if you could add a bit of detail around the trend. Where was that number a year ago, maybe where was it at the start of the year? Where is it trending? I don’t know if there was any other detail about your price – your average price versus MSRP, but I don’t want to get too greedy. And then a follow-up, you guys had made a big initiative on seeding a captive finance operation also through M&A.
I am curious if your path of growth there or the way you would fund that or grow that maybe changing given some of the changes in the credit environment? Thanks.Mike Manley Yes. Thanks. I would say that peak margins somewhere in the region, and Joe, you correct me there, somewhere in the region about 60% MSRP, 55%, 57% MSRP and as inventory levels have come in and as the monthly payment conditions in the marketplace have been changing with progressive rate increases, the subsidy of that net transaction price has driven us down slowly, but consistently to the numbers that Joe gave you. What I would tell is an interesting dynamic, because if you look at the availability of inventory across imports, domestics and luxury retail premium, obviously, they are at different stages.
So, what you see – what you do see, if you are looking from our land is you do see that direct impact of availability and demand. And so some of our divisions are performing at a much higher level of sales to MSRP, some are performing at a lower level. So, Joe gave you the blended average. Our expectation is – as I think everybody’s expectation is as more inventory comes into the marketplace as we continue to see higher monthly payments, and that will continue to mitigate not at a dramatic shock pace, but mitigate throughout the year. That’s my view and Joe, if you could answer, firstly, if you want to qualify what I said, feel free. But if you want to answer the question on funding for AN Finance, that would be great.Joe Lower Yes.
So, I will just – I will really reiterate, I think what Mike said on the PVRs and it really is almost by brand by model. As Mike said, if you go back again, by brand and model, it could have been as high as 70% or 80%, and we are seeing a general trend down. But still, as you know, at a much higher than it had been historically. And I would remind you that we really don’t price above MSRP and that’s continued. So, I think that’s another factor to continue. As far as the funding, our – I would tell you, we are continuing to be very opportunistic as it relates to the funding and as we have mentioned repeatedly, a very deliberate cadence on originations. We have warehouse facilities in place to provide a significant capacity. We continued to monitor closely the securitization market.
It is available, but we are going to access that when it’s most attractive given the other available funding vehicles we have. But strategically, our approach hasn’t changed, but we are being very mindful of kind of current market conditions and utilizing our balance sheet as effectively as we can.Adam Jonas Thanks Mike. Thanks Joe.Operator Thank you. We now have our final question from Rajat Gupta of JPMorgan. You may proceed.Rajat Gupta Hi. Good morning and thanks for taking my question. I just had a first one on capital allocation. If you can give us an update there, healthy start to the buyback here in the first quarter, how should we think about the cadence for the remainder of the year? And also, like any update on your plans and pipeline for acquisitions?
And relatedly, would you be willing to add more leverage to the balance sheet for more buybacks going forward? Thanks. And I have a follow-up.Joe Lower Yes. Let me tackle with a couple of questions there. Let me start first with maybe availability in capital. So, we benefited as you know, we have got some very strong free cash flow, which helps us significantly. From a leverage standpoint, we are still below 2.0. As we have said consistently, we are very comfortable in the 2x to 3x range. We are deliberate right now in being Brazil [ph] and making sure we have capacity to be opportunistic. But as we have said repeatedly, we highly value our investment-grade rating. It provides us some strategic and financial advantages. And so we will continue to operate in that framework.
