Average car dealership made £384 loss in May

The average car dealership in the UK made a loss of £384 in May, despite figures showing that car registrations have hit record highs.

According to ASE, the £384 average loss recorded in May comes in stark contrast to the £5,000 profit taken home in the same month the previous year. For the first five months of 2015, UK car dealerships are £27,000 worse off than they were for the equivalent period of 2014.

The news comes just days after the Society of Motor Manufacturers and Traders (SMMT) revealed that new car registrations up seven per cent in first half of 2015 to 1,376,889, which is the highest half-year performance on record. Dealer performance specialist ASE states that this is evidence of a further drop in the return on sales percentage.

It demonstrates the importance for car dealers to do their utmost to protect their profit; a road risks insurance policy or combined motor trade insurance policy are valuable safety nets to have in place to help with this. By having financial protection in place for the businesses assets, a dealership will not be left out of pocket in the case of flooding, theft or damage.

Mike Jones, chairman of ASE, commented: "Over recent months I have been highlighting a worrying trend as we see dealer new car sales falling whilst new car registrations continue to rise. This continued in May with sales down 5.2 per cent compared to May 2014. This was in contrast to the SMMT reported registrations data which grew 2.4 per cent year-on-year.

"Overall in the current year-to-date, whilst registrations are up 5.7 per cent, reported dealer sales are down 2.9 per cent. This provides clear evidence of an increase in dealer self registrations in 2015."