Car dealer profits drop in 2014

New figures show that car dealers are struggling with low profits this year in comparison to 2013.

ASE’s figures for August 2014 show a loss of over £15,000 for the average dealer. The numbers highlight a growing trend for sales occurring only during ‘fast-start’ months, or those falling at the end of a quarter. However, the ASE predicts that profits should improve after high numbers of registrations in September.

A drop in profits as well as significant losses will highlight the need for car dealerships to do more to reduce overheads. As a trader, taking another look at your motor trade insurance policy is one way of making savings. Shopping around to find the best quote, while also making sure that the company is sufficiently protected, can help ease the blow of falling profits as well as ensuring that there are no unexpected extra costs should you need to make a claim.

ASE chairman Mike Joes said of the profit fall: “This loss has pulled the rolling 12 month return on sales below 1.5 per cent for the first time since March, however we are confident that this trend will be reversed in September.

"Turnover for July and August is 10 per cent up on the 2013 comparative and the registration statistics for September were strong so we should see profitability rise above 1.5 per cent once more.

"This does, however, represent the second consecutive month where we have failed to reproduce the profits earned during the prior year."

Jones remained positive that sales of new cars in September would result in better figures in the coming months.