Used-car gross profits at $1.69M for average franchised dealer
Franchised dealerships sold nearly 15 million used cars last year, taking a 37-percent share of the pre-owned retail vehicle market, according to the NADA Data 2016 report.
And the average used-car department at a franchised store was pulling in annual gross profits of just under $1.69 million, the report said.
This annual financial profile of new-car stores — released by the National Automobile Dealers Association — said franchised dealers were selling used cars for an average price of $19,866 last year. This was 2.5 percent higher than prior-year figures.
NADA said that franchised dealers moved 14,968,206 million pre-owned vehicles in 2016.
As for 2017, the latest Manheim Used Vehicle Value Index report said that this year has started strong for franchised dealers, as well.
They increased their used-vehicle sales by 6 percent year-to-date through February, Cox Automotive’s Tom Webb said in the report, citing NADA.
Independent dealers increased used sales by 7 percent during this time frame, with overall pre-owned sales (a figure that includes private-party numbers) climbing 5 percent.
“Our channel checks indicate the gains continued in March,” Webb said.
As for the certified pre-owned market, Autodata reported that dealers retailed 243,277 CPO units in March, off by just 0.3 percent year-over-year when the all-time sales record was established.
For the quarter, Autodata indicated the CPO sales figure came in at 647,373 units, edging 0.1 percent higher compared to the first quarter of last year. The amount also was 0.8 percent higher than the fourth quarter of 2016.
Granted, these gains are flat compared to the overall used retail business, as the numbers above illustrate.
“Again, we suggest that CPO weakness relative to the overall market reflects the lack of potential gross profit lift for certain brands and market segments,” Webb said in the report.
Staff Writer Nick Zulovich contributed to this report.