Franchised dealerships’ gross profit up 35% to $2,245 per used vehicle sold

Article by Christian A., on December 25, 2010

The National Automobile Dealers Association revealed that the typical retail gross profit at franchised dealerships surged by 35% to $2,245 per used vehicle sold in the first 10 months of the year when compared to the same period in the previous year.

This is interesting since franchised dealers have been complaining about paying more for used vehicles. According to the dealership financial profile data, the average used-vehicle retail price increased by 10% to $16,371 in the same period.

This figure covers all model years. NADA's dealership profile is based on data from NADA dealership 20 groups and stands for a wide range of dealerships by size. Amid the current used-vehicle shortage, NADA chief economist Paul Taylor predicts that used-vehicle prices will remain firm if the economy’s growth continues at a relatively slow pace.

He said that used-vehicle gross profits are dependent on variables including new-car incentives. For typical NADA members, used-vehicle sales revenue such as finance and insurance revenue, increased by 21% in the first 10 months to $8.6 million.

NADA Used Car Guides, a subsidiary of NADA that studies and reports used-vehicle price data, indicates that the average wholesale price of used late-model vehicles (from 2 to 5 years old) increased by 11% to $15,911 through October compared to the previous year. [via autonews - sub. required]

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