Average dealer loses £17K in August

The consultants, ASE, have confirmed that August losses were £2,000 higher this year, coming in at just under £17,000.

The latest data means that ASE record the 12 month rolling profit for the average dealership at £182,000. Significantly, on the back of this data, the return on sales percentage dropped below 1% for the first time since August 2012.

However with higher levels of turnover in 2017, the average site profits stand £20,000 above the values earned in 2012.The used car trade saw an improved return on investment up to just under 90% in August.

ASE confirmed that older used cars performed strongly, and requested vigilance on vehicle stock days, which have started to increase. It said dealers will be at risk if there is a downturn in residual values. With bonus earnings central to the overall profit performance for the year, the manufacturer-set dealer retailer target levels for the last quarter of 2017 will be key in the annual profit calculations.

ASE point out that: “used car and aftersales profits remained strong, so overall performance is likely to not be as bad as the headlines would suggest. It does, however, appear that we are settling into a period of reduced retailer profitability from the heady heights of 2016 and 2017.”