In 2014, the seven publicly traded dealership groups (AutoNation, CarMax, Sonic, Penske, Group1, Asbury, and Lithia) retailed more than 1.3 million used units (in the U.S.), an increase of 8% from 2013. On a same-store basis, retail used vehicle deliveries have increased for 22 consecutive quarters – and the sales-weighted gain in the fourth quarter of 2014 (+6.8%) was the biggest of the year.
Although margins have been narrowing for many years, in the fourth quarter, the sales-weighted gross margin (9.2%) was nearly identical to its year-ago level.
The average used vehicle selling price for these dealer groups rose 3% to $20,775. This reflected a richer mix of units and a higher share of sales accounted for by certified units. Higher sales at higher prices and steady margins combined with increased operating efficiencies to produce record profits. It’s those profit opportunities that kept dealers bidding at auction.