Car Dealerships: Behind the Numbers

Car dealerships, like people, come in all shapes and sizes. In most metro areas, youíll see mainly large dealerships and in rural areas, you will see very small dealerships that may only have 5 new cars in stock. In areas where land is expensive and hard to find like New York City and some areas of California, often dealerships are built up with multi-story garages.

In the days I owned dealerships, my largest was a Ford dealership in the Dallas area. I had 30 acres, stocked a minimum of 2500 new Fords, could put 20 cars in my showroom, and had 400 employees. We were the largest Ford dealership in Texas in volume, and although stats are not kept on this, I suspect we were the largest in size, too.

The National Automobile Dealers Association keeps stats on all dealerships, and yearly releases the profile of the average dealership, taking the big ones and the small ones and putting the numbers together. I thought I would share some of the 2016 numbers with you this week, I am sure some will surprise you.

  • The average dealership in America employs 69 people.
  • The average dealership employee earned $69,000 last year. That puts dealership employees near the top of the highest paid in any industry.
  • The total payroll of all dealerships in America last year was 65 billion dollars.
  • The average dealership last year paid out 3.9 million dollars in compensation.
  • The total of all dealerships revenue last year was 995 billion dollars.
  • The average dealership revenue was 59.6 million dollars.
  • The top 10 states for sales of new vehicles, starting with the most, were: California, Texas, Florida, New York, Oklahoma, Pennsylvania, Illinois, Michigan, Ohio, and New Jersey.
  • New car dealerships wrote 259 million repair orders last year.
  • There are 16,708 new car dealerships in America as of the end of 2016.
  • Those dealerships combined sold 17,465,020 new vehicles last years.
  • The average dealership sold 1045 new vehicles in 2016.
  • The average selling price of all new vehicles was $34,449.
  • The average price of used vehicles sold at new car dealerships was $19,866.
  • 43.7% of the people who bought from a dealership purchased an extended warranty.
  • New car dealerships sold 14,968,206 used and factory certified vehicles in 2016.
  • 37% of all used vehicles purchased in 2016 were sold by new car dealerships.
  • The best month of 2016 was in December with 1,689,572 new vehicle sales.
  • The average number of vehicles in stock on any given day was 3,909,700. Domestics accounted for 2,056,400 of those, imports 1,853,300.
  • The number of cars on the road today is 264,000,000 and the average age of the cars on the road is 11.6 years old. This is a key predictor of future sales.
  • Dealerships billed auto manufacturers 21.24 billion dollars for warranty repairs in 2016.
  • Americans spent 35.43 billion dollars in repairs and maintenance last year.
  • Dealerships employ a total of 266,258 automotive technicians.
  • 37.4 percent of all dealerships last year operated body shops.

Car dealerships are just one piece of the auto industry as a whole. 7.25 million people are employed by some sector of the auto industry. That is almost 4 out of 10 people in America who are employed full time. Over half of the companies listed on the Dow Jones Industrial Average depend on revenue from the auto industry.

I hope this gives you some insight into the massive auto industry and the average dealership in America.
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