Operator: Thank you, Bret. Your next question comes from Colin Langan of Wells Fargo. Your line is open.
Colin Langan: Great. Thanks for taking my questions. Can you just go into what drove the new GPU decline, I think it was down about $300 quarter-over-quarter. Is that customer mix? What is causing that decline? And how should we think about that as we go forward, is that rate going to continue?
Mike Manley: I think the reality is that new GPUs are never going to be sustained at the level. And we’ve been talking about it for a long period of time that as new inventory levels begin to restore in the franchise network that you’re going to see a better balance. And I say better because it brings some volume back here in GPU’s drop, but ultimately what you’re trying to do is maintain the overall level of profitability. So it was really driven by the fact that inventory levels, of course, certain manufacturers began to recover. And I would say, well expected moderation of new GPUs. That’s how I would describe it. And I think you will see that in this year as well, and I don’t think it should come as a surprise to anybody.
Colin Langan: Got it. And how should we think about F&I, there were some article dealers getting concerned about with rising interest rates, people may scrutinize that line item — that payment. Are you much pressure in the quarter. I mean, how should we think about that as the year kind of progresses?
Mike Manley: So I think what you’ll see when you get rise in interest rates and it gets passed on, sort of, F&I rates with then staff and these penetration levels begin to drop a little bit, because other providers become more attractive and I think that’s what happens. Often it gets mitigated by an extension of the term, or and/or an increase in terms of deposit. The good news for us is our big focus really has been our focus on additional products within our CFS performance, so that we have a very balanced performance that as you’ve seen in our results consistently, consistently has been at what I think is great levels. So as interest rates continue to go, you see movement up the FICO range away from being subprime up to mid and into prime, you see, obviously, the lights passed on.
I think it’s for locomotive, the industry, I think about 2% of rate is now embedded in all of the finance that’s written in the United States. And you see a mitigation on penetration levels from captive or pseudo captive finance companies. But that’s how you should think about it. And that just says reinforces our focus on the additional products that add value to our customers that are not linked to an interest rate.
Joe Lower: Yes, the only thing I would add just to further clarify, more than 70% of our CFS is actually coming from product rather than financing. And as Mike indicated, is a real focus on increasing penetration, increasing profit per product is clearly our focus and I think underlies the confidence we have in being able to maintain that going forward.
Colin Langan: But just to be clear, those products in addition to the financing, those are still embedded into what the person pays. So when someone’s shopping the payment to keep those products, the payment would still be higher, right?
Joe Lower: In most cases, yes.
Mike Manley: Yes, I think they buy on standalone.
Colin Langan: Okay.
Mike Manley: But most cases, people like to pay on a monthly basis as well.
Colin Langan: Okay. Thanks for taking my questions.
Mike Manley: Thank you.
Operator: Thank you. Your next question comes from the line of (ph) of Morgan Stanley. Your line is now open, Danielle.
