Average gross profit per unit softened across the largest public dealer groups in Q2, but the story isn't all bad. New-vehicle margins came under real pressure. Used vehicles picked up the slack.
All eight top dealer groups posted year-over-year declines in new-vehicle gross profit per unit. Lithia fell $288 to $2,728, while Penske dropped $527 but still led the group at $4,374. Used-vehicle performance held up better across the board, Asbury improved used gross by $281 per unit, Lithia gained $107. Lithia stayed the volume heavyweight regardless, generating $9.8 billion in revenue across 467 stores.
Q2 was a lot better than Q1, and the economy is holding up.
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If You're Not Doing These Three Things, You're Leaving Money on the Table
New-car compression isn't a mystery, and it isn't going away this quarter. The stores holding steady aren't hoping it reverses, they're already making up ground somewhere else. Three specific moves separate them from everyone still waiting it out.
First, push used volume harder than you have been. Fewer new sales mean fewer natural trade-ins, which means the dealers who wait for inventory to walk onto the lot are going to come up short.
Second, go find those trade-ins and street purchases directly instead of waiting for them. If you're not actively buying off the street right now, you're competing for a shrinking supply of used inventory against everyone who is.
Third, if your service lane and direct customer acquisition aren't fully dialed in, that's not a nice-to-have anymore, it's the thing keeping the store profitable while new-car margins stay compressed.
None of this is a five-alarm fire. New-car profitability still isn't back to pre-pandemic lows, and early July numbers are already looking strong heading into what should be a solid third quarter. But the stores treating this as temporary and waiting it out are going to feel this compression a lot longer than the ones actively working around it right now.
What This Means for Your Store
Audit your own Q2 numbers against these three levers this week: are you actively sourcing trade-ins and street purchases, or just accepting whatever comes through the door? Is your service lane treated as a real profit center or an afterthought? If the honest answer to either is no, that's exactly where the next quarter's margin is sitting, waiting to be picked up.
