UK car dealers make average profit of £225,000 in 2014, ASE says

The average car dealer in the UK made a profit of £27,000 in December 2014, an improvement of £5,000 compared to 12 months earlier, new figures have shown.

According to ASE, on average a car dealer in Britain made a profit last year of £225,000, which is a new record high and £19,000 higher than the average profit achieved in 2013. However, the average profit margin per sale fell in this period, indicating that sales numbers have increased at a faster rate than sales values.

For car dealers, solo traders and businesses alike, if they are taking on greater amounts of stock thanks to an upturn in sales, it is important that they evaluate the cover they are getting from their road risks insurance and combined motor trade insurance policy. Having to drive a greater range of vehicles or having more cars stored at the business’ premises could require a more robust policy; speaking to expert brokers will help establish if this is the case.

ASE chairman Mike Jones commented on the findings: “Behind this record profitability was a split between different sectors of the industry with prestige car retailers having a superb year and producing an average return on sales of over 2.2 per cent.

“The high-end luxury dealers on average lagged slightly behind this overall result in percentage terms with volume dealers producing a return of just over one per cent.”