It's been a very good year for the finance and insurance industry.

F&I professionals agree that, barring a new-vehicle sales plunge, the business of lending to and insuring dealer customers should remain as strong in 1999, if not stronger than 1998.

Demand for carryover 1998 and new 1999 models has stayed on course, reaching the annual 15-million unit mark that began in 1992. That's because of strong global competition and manufacturers' hold-the-line pricing.

"We see no sign of the long-forecast slump in the new-car market," says Ford Motor Co.'s chief financial officer, John M. Devine.

"Moreover, the used-car market has kept its 1997-98 pace and the influx of off-lease vehicles has been absorbed without significant difficulties. We are very positive about 1999, in large measure because of the tight rein on interest rates by the Federal Reserve Board."

Big, medium and small players alike have benefited from the favorable climate conditions cited by Mr. Devine and counterparts J. Michael Losh at General Motors Corp. and Gary C. Valade at Daimler-Chrysler.

Sales and earnings of GMAC, Ford Credit and Chrysler Financial, the wholly-owned dealer lending institutions of the former "Big Three" automakers, reached record or near-record levels in the first three quarters of 1998.

As a result, GMAC and Ford Credit subsidiaries widened their coverage in the fast-growing subprime loan market.

And lenders greeted the '99-model year with dealer incentives on loan and lease business unprecedented in their scope and sensitivity to market conditions.

Chrysler Financial, while engaged in "partnership" discussions with the far-reaching Mercedes-Benz Credit team, seeks to keep pace on its carryover '99 models. It's offering a broader range of leasing packages and speeding adoption of a quick-approval loan process on its dealers' computer network.

In response, the second tier of independent players showed unusually active in 1998. Subprime attracted high-profile players such as GE Auto Financial Services, JM&A and Universal Underwriters. They sought "secondary lending" expansion in the wake of the big subprime market shakeout of 1997 and early 1998.

AmeriCredit Corp., a subprime pacesetter, gave its shareholders a glowing report at its annual meeting in Forth Worth, TX, Nov. 4.

Another bustling F&I area is extended vehicle service contracts.

Chrysler's Service Contracts operation again led GM and Ford in annual sales, surpassing the one-million mark, for the second year in a row.

That's a result of expanded benefit packages, including a half-day's vehicle rental total coverage past the basic warranty without deductibles. It's also a result of policies for tires and glass, items rarely insured before.

Independent service contract providers did well, too.

Forbes magazine's list of the "200 Best Small Companies in America," released in November, included two service contract independents. Those are:

Automobile Protection Corp. (APCO) of Atlanta, returning once again to the list, in 71 st place, with $106 million gross sales in 1997

Interstate National Dealer Services, Mitchell Field, N.Y., rated 85th, a list newcomer, with $48 million in sales

Also on the Forbes roster was another ambitious F&I provider, LoJack Corp., producer of stolen-vehicle tracking systems. based in Dedham, Mass., LoJack reported 1997 sales of $76 million and signed up CarMax as an exclusive superstore marketer.

The Richmond, VA-based CarMax was not the only superstore chain pursuing F&I products for competitive advantage.

United Auto Group, headquartered in New York City,- and the second largest publicly owned auto retailing network, reported that its 65 dealerships generated $89.5 million in F&I revenue during January-September of 1998. That's 3.5% of its total income.

UAG's captive lending division, UnitedAuto Finance, also had its first profit for the nine-month period, $534,000.

The floor plan side of dealer financing also became competitive in 1998. So aggressive have banks become in trying to seize a piece of wholesale business that a prominent CPA, Bill Randall, of Lewiston, ME, warned dealers to look twice before ceding their floor plan business to banks.

To offset lower rates than factory floor planners, banks often charge inventory and transaction fees. They also require equity, says Mr. Randall.

West Coast dealer consolidator Lithia Motors, Inc., turned not to a bank, but to Ford Credit when it came to nailing down a $350 million credit line for floor planning at its 28 dealerships and for buying more stores.

The floor planning connection should buoy Ford Credit's F&I business with Lithia across the board, say insiders.