It's a good time to be a dealer. How good? Dealers even made money on new cars last year.
The average retail net profit on a new vehicle was $23 in 2011 vs. a loss of $180 in 2010, said Paul Taylor, chief economist for the National Automobile Dealers Association.
"It's normally a loss," Taylor said, crediting the turnaround to an improving economy, fewer dealerships competing with one another and historically low interest rates.
Because of the low interest rates combined with manufacturer incentives, the average dealership had a floorplan credit of $48 per new vehicle retailed last year instead of the $200 floorplan expense for those vehicles typical in a growth year, Taylor said.
Overall, the average dealership made $785,855 in net pretax profit in 2011, a record since NADA began tracking the data in 1970. Net pretax profit as a percentage of total sales was 2.3 percent, a high not seen since at least 1978.
The result: Lots of happy dealers.
Said Dan Thompson, a Pennsylvania dealer accountant: "It's a lot more fun to work with our dealers than it was three years ago."