RALEIGH, N.C. -

The growth in revenues for privately owned used-car dealers has simmered down a bit, but revenues are still climbing — and what’s more, net profit margins are getting stronger.

That’s according to data provided to Auto Remarketing by financial information company Sageworks that covers privately owned used-car dealers.*

The revenue for these dealers from August 2012 to August 2013 climbed 7.2 percent from the previous period. The growth in trailing 12-month revenue in August 2012, however, was at 12.4 percent. Two years ago, it was at 10.8 percent.

That said, growth of more than 7-percent is nothing to sneeze at, particularly considering where the revenue curve was headed around the time of the recession.

“The data showed that during the actual recession in August 2010 and the period that preceded that, sales were negative, which means that their revenues contracted,” Sageworks analyst Libby Bierman told Auto Remarketing this week.

“And so what I think we’ve seen with the growth in 2011 and the growth in 2012, especially, is kind of a rebound in that market,” Bierman added. “So people who maybe pent up their purchases and hadn’t made their used-car purchases during the recession, afterwards they started to revisit the dealerships and made some of those big-ticket (purchases).”

As far as  revenue growth somewhat tailing off, it’s not something in which used-car dealers are alone.

“It’s actually a trend we’re seeing across the industries, where after the recession, we saw large spikes, especially in some of these industries that were hit hard,” Bierman said.

“But this past 12-month period, we’ve really started to see a slight slowdown,” she continued. “They’re still growing — 7-percent is still something to be happy about — but it’s not quite the level of growth they would have seen the year before that or two years ago.”

One area where growth has continued to escalate among these private used-car dealers is in net profits. The trailing 12-month profit margin in August was 4.3 percent, according to Sageworks, compared to respective margins of 3.1 percent, 3.7 percent and 2.7 percent in the preceding 12-month periods.

This trend is another one Sageworks is seeing across various industries, where “private companies are improving their net profit margins,” Bierman said.

 “What that means is that these companies are learning to operate maybe with a little bit leaner of operations, and take home a few more cents per dollar than they maybe did during the recession,” she continued.

It’s important to note that these dealers are achieving these stronger margins even amid higher wholesale prices to acquire used units. Bierman said this does go back to having leaner operations, but the revenue growth plays a huge role as well.

“When their top line grows as much as it did — double-digit growth — that’s going to really help them cover their fixed costs,” she said. “So, rent, for example, is going to be a lot smaller of a portion of their revenue, if that revenue line grows so much.”

*Editor’s Note: Bierman explained to Auto Remarketing that the data is derived from the banks and accounting firms that use Sageworks’ programs to analyze their businesses. Sageworks aggregates the data and provides benchmark. The used-car dealers referenced here would be the ones that work with Sageworks’ customers. Sageworks provides industry data on private companies across several industries.