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A Strange Year Surges Dealer Profits by 48%

In a recent report by Automotive News, a leading automotive industry publication, it was reported that U.S. dealership profits surged 48% on average to a record high. While last year was a tough year for most Americans, those at car dealerships were able to set aside quite a bit of cash. How did this happen?

The long and short of it is that despite sales going down 14.6%, low supply of new and used cars led to an increase in prices, and an increase in gross profit per car for dealerships. Gross profit per car increased by 13% on used cars and 22% on new cars.

Another interesting shift that occurred last year was the dramatic increase in sales for more expensive vehicles. During the 4th quarter of 2020, sales of vehicles priced between $80,000 and $90,000 increased by 91% when compared to the same period in 2019. During the same time comparison, vehicles under $20,000 saw a 30% drop in sales, vehicles between $20,000 and $30,000 saw a 7% drop in sales, and vehicles over $100,000 saw a staggering increase of 63% more sales.


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