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2018 Dealership Facts & Figures – New Vehicle Sales

This article is part 2 of our annual series analyzing the results of our dealer clients for the first nine months of 2018 compared to 2017. 

As noted in our previous installment, new vehicle year to date sales are relatively flat (a .5% increase) compared to 2017 on a national basis. For Massachusetts dealers, the picture was not quite as rosy as new vehicle sales dropped 1.8%. Analysts still believe that new vehicle sales will surpass 17 million vehicles for 2018.

New Unit Sales 

  • Overall, our dealer clients experienced a 1.9% decrease in unit sales.

Vehicle Profitability

  • 52% of dealers reported declines in their gross profit dollars from new vehicle sales.
  • Our findings indicate that dealers averaged $1,104 in gross profit per vehicle for 2018, a decrease of $92 from 2017.
  • In comparison, 2017 gross profit per vehicle was a decrease of $45 from 2016.

F&I Income

While new unit sales nominally increased nationally and decreased for Massachusetts dealers, Finance and Insurance (F&I) showed some positive results.

  • 54% of dealers reported an increase in F&I income per unit sold.
  • On average, F&I income rose by 3.3%.
  • F&I income averaged approximately $905 per vehicle, an increase from 2017 of $29.

Combined Profitability – Gross Profit Plus F&I

The following summarizes profitability on a per vehicle basis:

  2018 2017 Change
Gross profit/vehicle $1,104 $1,196 $(92)
F&I income/per vehicle $905 $876 $   29
Combined/vehicle $2,009 $2,072 $(63)

The results are a continuation of a trend that we have seen for a number of years. Dealers continue to battle shrinking margins and look toward other revenue producing areas to maintain profitability. While new unit sales continue at a near record volume, dealers must stay diligent to ensure that they are participating in this strong sales environment.

If you have any questions regarding this article, please contact Charlie Paolino at CPaolino@DowneyCoCPA.com or at 800-849-6022.

Downey Co CPA