Average car dealership made £9,000 profit in April, study finds

Average car dealership made £9,000 profit in April, study finds

The average car dealership in the UK made a profit of £9,000 in April, new research has revealed.

As the motor trade industry continues on its upward trajectory, profitability figures from ASE show that dealers on average enjoyed an increase in profits of 36.4 per cent compared to April 2013. While the average return on sale (ROS) stood at 1.55 per cent – below the standard benchmark of three per cent – the figures are still declared by ASE as being a positive indication of dealerships adding to their bottom line.

With such a sizeable improvement in profits compared to 12 months before, it is likely that many car dealers will have increased the number of vehicles coming in and out of their showrooms. At Bollington we are always keen to stress that companies ought to consider the potential implications any dramatic changes to business practices or volume might have on their motor trade insurance policies.

Growing businesses may extend their premises, workforce or increase the number of vehicles and tools they have on site. All of these things will need to be reflected in a combined motor trade policy, lest a firm finds it does not have adequate cover for the complete value of its assets.

Compared with April 2013, the average dealer has sold 48 more new cars and 41 additional used cars this year.

A statement from ASE commented on the findings: “It is a very creditable performance given the impact of Easter and the inevitable lull after the end of quarter one."