NADA Report: New-Car Dealership Profits Remain Steady at 2.2%

MCLEAN, Va. - For the third straight year, net pretax profit at new-car dealerships as a percent of total sales was 2.2 percent, says the National Automobile Dealers Association in NADA Data 2014, the annual report on dealership sales and financial trends.

"Fierce price competition among dealers for sales and service left dealership profitability unchanged for the third straight year," said NADA Chief Economist Steven Szakaly. "The 2.2 percent figure represents sales in the new- and used-vehicle, service and parts departments. That's more than a full percentage less than many other retailers."

Other highlights from NADA Data 2014 include:

Total dealership revenue, which included new- and used-car sales, as well as parts and service, reached an all-time high of $806 billion in 2014, an increase of 8.6 percent from the previous year.

The average retail-transaction price of new cars and light trucks increased to $32,618, up 2.7 percent from 2013. Average used-vehicle retail prices also moved higher by 4 percent to $18,846.

The number of retail customers purchasing a new- or used-vehicle service contract remained effectively unchanged at 41.7 percent compared to the previous year, the report said.

Combined recall and warranty work performed by America's new-car dealers increased by 21.6 percent to $8.5 billion in 2014.

Click to view the full NADA Data 2014 report.