Dealership Profits Reached Record Levels in 2022

Profits per location for dealerships owned by public auto retailers reached an estimated $6.5 million, more than triple pre-pandemic levels, according to the Q4 2022 Haig Report. Experts believe that profits may have peaked as vehicle prices for new and used vehicles are coming down and operating expenses are going up due to more recalls and higher labor rates. In 2022, 566 dealerships were acquired, making 2022 the second most active year in the buy-sell market behind 2021. However, private dealers acquired 526 dealerships, a 7% increase from 2021. Public companies continue to be looking for acquisitions this year as their share prices have recovered and because auto dealers continue to generate significant profits, even if these profits will not be as high as they were in 2022.