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Drive to Success: Fight Margin Compression with Improved Operational Efficiency

by Lindsay Lauck
on September 9, 2019

Auto dealers have heard it again and again: People are buying cars, yet margin compression continues to chip away at dealership profits. In some cases, dealers are selling automobiles at a loss! Could a growing focus on operation efficiency really be the path to profitability? Are there hidden centers of income within your business waiting to be optimized? Read more:

1 – Are You Losing Money Across Your Operation?

Digital Dealer: Dealers can’t live on a 1.5% gross profit margin. Instead, take a look at the first part of this efficiency series to prepare for the seasonal “Must Do’s” at your dealership.

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2 – Selling New Cars Proves Unprofitable For Most Auto Dealers

Forbes: The average new car is selling for a $735 loss at most dealerships. Compressed margins are forcing dealers to look for other sources of income, and fast!

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3 – How Can a Company have a Negative Gross Profit Margin?

Investopedia: We often hear a lot of talk about margin compression in the auto industry. But, how well understood is this key metric? Do you know the ins and outs of margin compression?

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4 – Auto Dealers Losing Money on Operations, NADA Says

Automotive News: Dealers are focusing on areas of the business that can more easily turn a profit. According to the National Automotive Dealers Association, the majority of dealers are cutting costs in areas such as advertising and even parts and service.

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5 – Is Your Dealership Declining in Market Share and Profitability?

Aimyes: While dealerships are selling more vehicles, the bad news across the board shows very little profit. Here is a list of departments where operational efficiency could improve your profits to combat shrinking margins.

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Tags: DMS, Drive to Success, Margin Compression