The average franchised dealership's used-vehicle department generated more than a quarter of the store's operating profits and more than a quarter of its sales last year.
"NADA Data," the National Automobile Dealers Association's annual report on the state of the retail auto industry, indicated that used vehicles accounted for 26 percent of the average dealership's operating profits in 2001 and 29 percent of its total sales. In 2000, used vehicles made up 22 percent of the average dealership's operating profits and 28.6 percent of its total sales.
The average net profit from a used vehicle was $244 last year, compared with $186 for a new vehicle, the May report said.
The popularity of leasing helped create a large pool of used vehicles, and factory-backed certified used-vehicle programs have helped boost the market for used vehicles.
"Good customers for new cars will often have used-car needs as well, and the dealer wants to take care of those," said Paul Taylor, NADA's chief economist. "Recent innovations like extended factory warranties and certification helps sell used cars, and service work helps the bottom line as well."