Car dealership profits fall in May, report finds

The average profitability of car dealerships in the UK has fallen in the month of May, new research has revealed.

The latest figures from ASE Automotive Solutions, a motor industry advice and service company, show that car dealerships made an average profit of £5,000 in May 2014, down from £7,700 in the corresponding month last year. However, average turnover was up nine per cent this year compared to last, indicating a steady growth in the market.

For a company wishing to maximise their profits, one approach is to get the best possible deal on its motor trade insurance. Shopping around for the cheapest quote could save a firm some money but another option is to focus on getting the best policy to meet the business’ needs as this will ensure the company is not left out of pocket should it need to make a claim, meaning profit figures are not eroded.

The ASE says that, despite the fall in profits in the motor trade industry, there is plenty of reason for optimism, largely due to the increasing number of vehicles being bought and sold.

The company reported: “Used vehicle performance remained steady in the month, although we are continuing to see a slow and steady decline in the days in stock.

“While there is no sign of a price crash yet, with many dealers reporting to us they are short of stock, improvements in vehicle stock turn are clearly welcome.

“The decline in vehicle sales expenses as a percentage of growth appears to have stopped, although we will only truly be able to assess this at the end of the second quarter once all the bonus income is recognised.”