As it relates to deployment of capital, I would say it hasn’t changed. We have always indicated that we are based on returns. We look at organic, inorganic and share repurchase really from the standpoint of returns. We have viewed AN USA as a very attractive return. And frankly, the returns have exceeded our initial expectations. We will continue to fund that appropriately. We look very opportunistically at acquisitions those that we have been able to identify, and we feel very good about, as Mike indicated, but we maintain a discipline in this marketplace. And share repurchase continues to be attractive at these price levels. And so we are going to continue to have a balanced approach. It’s going to shift based upon the relative opportunities, and we will use a modest level of leverage as opportunities arise, whether those are organic, inorganic or share repurchase.
So, kind of within those parameters, we intend to continue the path we have been on with modest shifts just based upon availability of opportunity.Rajat Gupta Understood. That’s a good color. You mentioned earlier in the call in the prepared remarks that there was a slight improvement in the finance penetration versus 2022 ending levels. With credit union, it is what we are hearing continuing to tighten their standards. Should we expect a further increase in penetration there? And relatedly, for F&I outside of finance, could you give us an update on how the penetration of other ancillary products have trended since the pandemic, and would you expect penetration for those also to remain sticky going forward? Thanks.Mike Manley Yes, this is Mike.
As we mentioned in the opening comments, the number of products that we sell on new has been very stable. And I think that obviously speaks to the focus and the processes that we have in place. We have seen some mitigation on used, as you may expect. It doesn’t mean they are more sensitive in terms of their monthly payments. I think everybody is sensitive in terms of their monthly payments. I just think that they are more exposed to the increases in the interest rates. Our penetration on – our penetration overall remains stable. New has shown continued strength, particularly as some of the OEMs are coming back into the market with subsidized finance, obviously helps and adds another tool to the bag. On used, as I mentioned before, from a FICO perspective, there has been a reduction in subprime and deep subprime, I expect that to continue.
A lot of that is by choice, I would say. So, that’s how I would expect it to continue. In terms of is there upside, from my perspective, I think price, obviously, there has always been sensitive and at the end of the day, it comes back to that monthly payment, and that includes not just the vehicle, but all the product services, warranties and everything else. And therefore, sometimes, to get to those monthly payments, you take a contribution across the whole of the services and products that you are selling to get a balanced response to what the customer needs, if it’s possible. So, I wouldn’t imagine that there would be significant upside on that. I think we have some great processes in place. There is no – that doesn’t mean to say there is not room for improvement.
I think there always is. But I think to some extent, you may see some trade-off between penetration and margin in those products.Rajat Gupta Understood. Great. Thanks for the color.Operator Thank you. We have no further questions on the line. So, I would like to hand it back to Mr. Manley for any final remarks.Mike Manley Yes. Okay. Thank you very much. Again, thanks for your time on the call today. We appreciate it. We also appreciate the questions. And by your questions, you also give us insight on what’s on your mind. And again, I will just end by thanking all of my associates and colleagues within AutoNation. And as I have said, we also in this quarter, have been very pleased to welcome all of RepairSmith employees into our family as well.
So, with that, I wish you all a great day. Thank you very much for your time.Operator Thank you for joining. This does conclude today’s call. You may now disconnect your line and have a lovely day.
