The combination of surging new and used vehicle sales, demand for financing and very busy service departments helped auto dealers post their best year ever in 2014.
The National Auto Dealers Association, which represents the 16,300 auto dealers in the U.S., says the average auto dealership boosted its net profit (before taxes) in 2014 by 6.7 percent to $1.09 million dollars. It is the fifth straight year dealers have increased net profits, though the profit margin of 2.2% remained unchanged compared with 2013.
"Auto dealers are clearly doing much better than they were just a few years ago," said Steve Szakaly, Chief Economist for NADA. "But with a profit margin unchanged at 2.2 percent, it shows just how fierce the price competition is right now for new vehicles."
