EDITOR'S NOTE: This article has been corrected to remove an incorrect figure in the second paragraph.
Last year was the best ever for auto dealership profits. And all the signs point to 2013 being even better.
In 2012, pretax profit at the average U.S. dealership rose 6 percent to $843,697, according to an annual study by the National Automobile Dealers Association.
The average dealership's new-vehicle department posted the highest net profits since 2004, on higher volume and per-vehicle revenues. The used-vehicle department also saw rising units and per-vehicle revenues, though higher costs trimmed per-vehicle profits a bit.
As new light-vehicle sales rise toward a possible 16 million units this year in an overall good economy, David Westcott, NADA chairman and owner of Westcott Automotive in Burlington, N.C., is optimistic about the industry's profits this year.
Westcott said he sees two major "clouds on the horizon." The first is the uncertainty surrounding the impact of the Affordable Care Act; the second is possible future regulation of lenders, which could hurt profits in dealerships' finance and insurance offices.
But news last week that the Obama administration has delayed implementation of changes to the health care rules pushes one of those worries back a year.
Industrywide dealership pretax margins -- profits as a percentage of revenues -- fell slightly to 2.2 percent last year, from 2.3 percent in 2011, but remained above 2010's 2.1 percent, which had been the highest in 24 years.
Net profit per new vehicle retailed rose to $111, from $23 in 2011 -- a major rebound from a net loss of $180 in 2010. The new-vehicle department had been in the red for five straight years through 2010, the longest losing streak on record.
New-vehicle profits rose last year on a 13 percent gain in sales volume; a 0.8 percent rise in the average selling price, including accessories and options; and lower floorplan costs because of low interest rates.
Net profit per used vehicle retailed fell to $194 in 2012, from $269 in 2011; NADA blamed the high cost of procuring used cars, plus higher related personnel and advertising expenses.