Dealer Net Profits Rise During Supply-Chain Crunch

As everyone reading this blog well knows, there has been a shortage of new vehicles this year due to a variety of factors.  Although the auto industry is continuing to struggle with supply-chain constraints, one area that is seeing record profits is car dealerships.  Dealers have seen net profits rise by 112-140% this year.  According to data from the National Automobile Dealers Association, profits are up 65 percent on new car dealerships (with foreign imports performing the best) and 36 percent on used car dealerships.

NADA's mid-year report reflected this strong rebound and trajectory, with a June YTD sales increase from $437 billion to 600 billion as of June.  The average retail selling price of used vehicles sold by new-vehicle dealerships rose from $21,210 to $24,540 in 2021.  NADA reported that reduced incentives and high demand increased average transaction prices to over $40,000.  As of September, that number topped $45,000.