STATE OF THE INDUSTRY REPORT 2010

www.nada.org/nadadata
T
he nation’s franchised new-car dealers sold just 10.4 million new light vehicles in 2009, as the
recession deepened in the first half of the year. Sales were down dramatically from the previous year’s
13.2 million units. The good news? Used-car values increased as the shortage of used units started
to limit sales for used vehicles. The demand for used cars increased more quickly than the supply increased.
This shortage of used vehicles, along with other factors, contributed to higher second-half new-vehicle sales
and a V-shaped recovery of manufacturing in the United States. The typical dealership’s dollar sales started
to rise in each department as the economy began to grow in the second half of 2009. Consumer confidence
also started recovering in 2009, with the Conference Board’s Index of Consumer Confidence first stabiliz-
ing and then making modest upward moves during 2009 and early 2010.
Although the rate of job creation has headed upward, the number of inactive job seekers returning to
the labor force has kept unemployment rates just short of 10 percent during the first half of 2010. Housing
prices have stabilized in most states and are moving slowly upward in some states. Pent-up demand for
housing, typical of most recoveries, will not characterize this recovery.
The Federal Reserve has made it clear that short-term rates are likely to remain low during 2010. The
approach to the crisis in confidence in the financial markets, where counter-parties over-promised and
under-delivered hedging for the mortgage market, was to treat it as a liquidity problem and supply much
monetary ease. Add to that the strong net stimulus in fiscal policy in the economy and the stage is set for a
U.S. monetary and fiscal policy that will need to be reigned in by late 2011.
Dealerships in 2009 benefited from a 3.5 percent
increase in used-car sales revenue and a modest 1.9 percent About this special section
gain in service and parts sales, even as new-vehicle sales On the following pages, you will find the re-
fell 15 percent. Total 2009 dealership dollar sales were an sults of NADA’s yearlong analysis of the U.S.
estimated $487 billion, down by more than a billion from car and truck industry, with emphasis on the
2008, as the number of dealerships declined. Dealerships’ retail side of the business.
payroll employment dropped to just under one million The key segments covered are:
people. Total payroll expense in 2009 fell to $43.5 billion, Average Dealership Profile............................ 2
down 18.2 percent from 2008. NADA Optimism Index................................... 3
Dealership expenditures, excluding cost of goods sold, New-Car Dealerships..................................... 4
dropped to an estimated $71 billion in 2009 from $77 bil- Total Dealership Sales Dollars....................... 5
lion the previous year. New-vehicle dealers remained major The New-Vehicle Department......................... 7
generators of federal, state, and local tax revenue, as well as
F&I, Service Contracts.................................. 9
major contributors of both time and money to local and
The Used-Vehicle Department .................... 10
regional charities.
Service, Parts, and Body Shop.................... 11
Note: NADA’s Industry Analysis Division (Paul Taylor, chief Employment and Payroll............................. 13
economist) prepares NADA Data. Contact NADA Industry Vehicles in Operation and Scrappage........... 15
Analysis, 8400 Westpark Drive, McLean, VA 22102, call Advertising and the Dealership.................... 17
800.252.NADA, or e-mail [email protected].
Consumer Credit........................................ 18
New-Truck Dealerships............................... 19
1 NADA DATA 2010        nada.org
Dealership Financial Trends........................ 20
Average Dealership Profile
New-vehicle sales for the nation’s franchised dealers 4.7 percent. Floor-plan expense fell and advertising outlays
fell to 10.4 million units in 2009 as recession in the first decreased 13.6 percent. Some major expenses for the aver-
half of the year continued to diminish new light-vehicle age dealership last year:
sales. Total dealership revenue decreased to an estimated Payroll ...................................... $2,354,000
$501 billion from $598 billion in 2008. Used-car sales Advertising................................... $292,010
regained profitability in 2009 after a slight net loss in Rent and equivalent.......................$398,456
2008. New-vehicle sales revenue fell by 15.4 percent from
2008 while used-car revenue increased by 3.5 percent. Net TOTAL DEALERSHIP PROFITS
profit for the typical dealer increased by 43.7 percent from Used cars, along with service and parts, produced all of
2008, yielding 1.5 percent net profit before taxes on total the operating profits in 2009, as new-vehicle net profits
sales, or $398,067 in net pretax profit for 2009, up from remained in the red, which is typical for a recession year.
$277,045 for 2008.

TOTAL GROSS AND EXPENSE

Average total dealership gross as a percentage of sales
improved to 13.7 percent in 2009. Operating profit
increased to 0.5 percent. Total expense dropped a modest

Average dealership profile

% change
2004 2005 2006 2007 2008 2009 2008 to 2009
Total dealership sales $33,009,335 $32,318,461 $31,855,768 $33,379,501 $28,517,867 $26,378,752 -7.50%
Total dealership gross $  4,363,870 $  4,307,479 $  4,338,448 $  4,546,212 $  4,077,497 $  4,020,028 -1.40%
As % of total sales 13.20% 13.30% 13.60% 13.60% 14.30% 15.20%
Total dealership expense $  3,804,184 $  3,776,446 $  3,848,964 $  4,038,084 $  3,800,451 $  3,621,961 -4.70%
As % of total sales 11.50% 11.70% 12.10% 12.10% 13.30% 13.70%
Net profit before taxes $   559,686 $   531,033 $   489,484 $   508,127 $   277,045 $   398,067 43.70%
As % of total sales 1.70% 1.60% 1.50% 1.50% 1.00% 1.50%
(Net pretax profit in $   296,287 $   271,906 $   242,799 $   245,117 $   128,679 $   185,579 44.20%
constant 1982 dollars)

New-vehicle department sales $20,116,264 $19,469,000 $18,795,482 $19,545,287 $16,302,280 $13,798,152 -15.40%
As % of total sales 60.90% 60.20% 59.00% 58.60% 57.20% 52.30%
Used-vehicle department sales $  9,090,534 $  9,067,128 $  9,265,366 $  9,821,093 $  8,164,415 $  8,452,020 3.50%
As % of total sales 27.50% 28.10% 29.10% 29.40% 28.60% 32.00%
Service and parts sales $  3,802,537 $  3,782,334 $  3,794,920 $  4,013,121 $  4,051,172 $  4,128,580 1.90%
As % of total sales 11.50% 11.70% 11.90% 12.00% 14.20% 15.70%
New-vehicle average selling price $    28,060 $    28,381 $    28,451 $    28,797 $    28,350 $    28,966 2.20%
Used-vehicle average selling price $    14,247 $    14,923 $    15,518 $    15,714 $    15,200 $    14,976 -1.50%
Average net worth (as of 12/31) $  2,301,417 $  2,258,753 $  2,160,181 $  2,306,742 $  2,251,583 $  2,213,007 -1.70%
Net profit as % of net worth 24.30% 23.50% 22.70% 22.00% 12.40% 18.00%
Source: NADA Industry Analysis Division

nada.org        NADA DATA 2010 2

NADA Optimism Index
The consumer confidence index increased to a level of
57.7 in April 2010 and then rose to 63.3 in May, accord- Expectations for dealership profits
ing to the Conference Board.
Percent of dealers expecting profits to:
Improved consumer confidence has resulted, in part, Value
Increase Not change Decline index
from the stabilization of home prices currently under way
April 1997 42.4% 44.0% 13.6% 135
in most states, and should contribute to higher new-vehi- April 1998 41.9 43.3 14.8 134
cle sales during the second half of 2010. April 1999 56.5 37.8 5.8 164
The NADA Optimism Index, which reflects new-vehi- April 2000 49.0 39.9 11.1 149
cle dealers’ optimism about profitability over the coming April 2001 31.5 40.7 27.8 107
March 2002 53.2 36.7 10.1 153
quarter, dropped below 80 in the third quarter of 2008
March 2003 40.2 42.6 17.2 129
and stayed below that level through the second quarter of March 2004 47.1 40.9 12.0 143
2009. In third-quarter 2009, the NADA Optimism Index March 2005 41.6 38.7 19.7 129
jumped to 136 and stayed above 110 before increasing to March 2006 32.9 41.1 26.0 108
140 in the first quarter of 2010 and then 154 in the sec- March 2007 40.7 42.6 16.7 128
March 2008 28.0 44.2 27.8 98
ond quarter. In past recessions, strong improvements in
March 2009 18.6 39.9 41.5 68
the index were followed by higher light-vehicle sales.
March 2010 54.2 34.4 11.4 152
Source: NADA Industry Analysis Division

Optimism index vs. new-vehicle sales

200

175

150

125

100

75

50
NADA Optimism Index
25 New-vehicle sales

0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: NADA Industry Analysis Division

3 NADA DATA 2010        nada.org

New-Car Dealerships
The recession further increased
franchised dealer body consolidation, Number of dealerships, by volume of new-unit sales
not to mention manufacturer finan-
cial troubles. The net closure rate of Number of dealerships 1990
dealerships was 1,550 during 2009. 9,000
8,267
2000
2010
Expect the number of dealerships 8,000

closed on a net basis to be nearer to 7,000

6,330 6,119
500 in 2010. 6,074 5,896
6,000 5,511 5,313
The bar graph at right shows that 4,915
5,000 4,682 4,552
the loss of dealerships over the past 20 4,161
4,000 3,715
years has been largely concentrated in
3,000
the smaller-volume categories. At the
beginning of 1990, there were 6,330 2,000

dealerships with sales of less than 150 1,000

new vehicles per year. Today, there 0
0-149 150-399 400-749 750+
are only 4,161 such stores. In con-
Annual new-unit sales Source: NADA Industry Analysis Division
trast, 8,267 dealerships now sell 400-
plus new units per year despite slow
sales during the recession; in 1980, New-car dealerships New-car dealerships, by state
also a severe recession year, 7,673
As of January 1 As of January 1, 2010
stores of that size existed. In 1990, a
1989 25,000 Alabama 321 Montana 123
less severe recession year, there were 1990 24,825 Alaska 32 Nebraska 194
10,228 such stores. Arizona 233 Nevada 104
1991 24,200
Arkansas 241 New Hampshire 149
Recovering new-vehicle sales will 1992 23,500 California 1,357 New Jersey 509
place many dealerships into larger 1993 22,950 Colorado 265 New Mexico 127
1994 22,850 Connecticut 279 New York 951
sales categories in the next two years.
1995 22,800 Delaware 58 North Carolina 600
D.C. 1 North Dakota 91
1996 22,750
Florida 863 Ohio 812
1997 22,700
Georgia 532 Oklahoma 287
1998 22,600 Hawaii 62 Oregon 249
1999 22,400 Idaho 112 Pennsylvania 1,002
2000 22,250 Illinois 826 Rhode Island 56
2001 22,150 Indiana 454 South Carolina 277
Iowa 334 South Dakota 109
2002 21,800
Kansas 243 Tennessee 371
2003 21,725 Kentucky 275 Texas 1,241
2004 21,650 Louisiana 304 Utah 139
2005 21,640 Maine 138 Vermont 87
2006 21,495 Maryland 315 Virginia 492
Massachusetts 426 Washington 347
2007 21,200
Michigan 690 West Virginia 147
2008 20,770
Minnesota 385 Wisconsin 545
2009 20,010 Mississippi 211 Wyoming 66
2010 18,460 Missouri 426 Total U.S. 18,458
Source: NADA Industry Analysis Division Source: NADA Industry Analysis Division

nada.org        NADA DATA 2010 4

Total Dealership Sales Dollars
Total dollar sales at the nation’s
new-vehicle dealerships fell to $486.9 Total sales of new-car dealerships
billion in 2009 from $576.1 billion.
$ billions $ millions
New-vehicle sales dollars fell by 15.4 800 35
percent, while used-vehicle sales reve-
nue increased by 3.5 percent. Average 700
new-vehicle expenditure rose to
30
$28,966 from $28,351. Used-car pric- 600
es fell slightly, to $14,976 from
$15,200, as gross as a percentage of 500
selling price increased to 11.49 per- 25
cent. Dealers returned to a profit per
400 All dealerships (left scale)
used car retailed of $148, after a $5 Average per dealership (right scale)
net loss during 2008. Sales dips were
300 20
most difficult in the West and in 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Sources: U.S. Department of Commerce; NADA Industry Analysis Division
Florida and Georgia.

Share of total dealership 2009 total sales, by state

sales dollars
Average per Average per
By department All dealerships dealership All dealerships dealership
State (millions) (thousands) State (millions) (thousands)
2009 Alabama $6,426 $20,019 Montana $1,926 $15,659
Alaska 1,016 31,745 Nebraska 3,275 16,881
Service Arizona 9,935 42,640 Nevada 3,348 32,192
and parts
Arkansas 4,290 17,799 New Hampshire 3,288 22,064
15.7%
California 49,465 36,425 New Jersey 19,261 37,840
Colorado 7,456 28,137 New Mexico 2,723 21,438
New vehicles Connecticut 6,627 23,752 New York 29,814 31,351
Used vehicles 52.3%
32.0% Delaware 1,358 23,418 North Carolina 13,745 22,908
Florida 28,181 32,654 North Dakota 1,580 17,358
Georgia 12,888 24,225 Ohio 17,763 21,876
Hawaii 1,777 28,665 Oklahoma 19,135 66,672
Idaho 1,833 16,370 Oregon 4,773 19,170
Illinois 20,405 24,704 Pennsylvania 22,751 22,705
1999 Indiana 8,692 19,145 Rhode Island 1,594 28,472
Iowa 5,580 16,705 South Carolina 5,834 21,061
Service Kansas 4,573 18,817 South Dakota 1,549 14,210
and parts
11.2% Kentucky 5,550 20,181 Tennessee 8,656 23,331
Louisiana 7,047 23,180 Texas 41,153 33,134
Maine 2,515 18,225 Utah 3,960 28,491
Used vehicles New vehicles Maryland 9,817 31,166 Vermont 1,251 14,383
28.9% 59.9% Massachusetts 12,063 28,317 Virginia 13,253 26,936
Michigan 16,796 24,342 Washington 8,910 25,678
Minnesota 7,560 19,637 West Virginia 2,618 17,811
Mississippi 3,422 16,217 Wisconsin 8,551 15,690
Missouri 9,890 23,215 Wyoming 1,027 15,566
Source: NADA Industry Analysis Division Total U.S. $486,899 $26,379
Source: NADA Industry Analysis Division

5 NADA DATA 2010        nada.org

Relationship of new-car dealerships to total retail trade in 2009, by state (estimated)
Number of dealers as % of Dealer sales as % of Dealer payroll as % of Dealer employees as % of
total retail establishments total retail sales total retail payroll total retail employment
in the state in the state in the state in the state
Alabama 1.7% 13.1% 10.8% 6.0%
Alaska 1.6% 10.4% 9.3% 5.5%
Arizona 1.7% 14.0% 11.8% 6.8%
Arkansas 2.4% 12.9% 11.1% 5.8%
California 2.2% 13.9% 11.0% 6.5%
Colorado 1.5% 14.1% 11.4% 6.1%
Connecticut 2.5% 13.0% 12.1% 6.7%
Delaware 1.8% 12.8% 13.2% 7.2%
Florida 1.8% 14.2% 11.8% 6.6%
Georgia 1.8% 14.0% 11.4% 6.2%
Hawaii 1.3% 10.4% 11.6% 5.3%
Idaho 2.0% 11.9% 10.5% 6.1%
Illinois 2.7% 13.1% 11.7% 6.4%
Indiana 2.3% 12.3% 11.0% 6.1%
Iowa 3.0% 12.4% 11.4% 6.0%
Kansas 2.7% 12.7% 11.8% 6.2%
Kentucky 2.1% 11.2% 9.9% 5.4%
Louisiana 2.0% 13.3% 12.2% 6.5%
Maine 2.0% 10.8% 10.5% 5.7%
Maryland 2.1% 14.5% 12.9% 7.2%
Massachusetts 2.1% 12.5% 11.2% 5.7%
Michigan 2.5% 15.2% 12.8% 6.7%
Minnesota 2.0% 12.4% 10.3% 5.8%
Mississippi 1.9% 12.3% 9.8% 5.2%
Missouri 2.2% 13.2% 11.5% 6.2%
Montana 2.6% 11.8% 9.9% 6.0%
Nebraska 3.0% 12.4% 11.3% 5.9%
Nevada 1.4% 12.2% 11.7% 6.1%
New Hampshire 2.7% 12.5% 11.9% 6.2%
New Jersey 2.1% 14.2% 12.1% 6.2%
New Mexico 2.5% 12.6% 11.7% 6.7%
New York 1.7% 11.1% 8.7% 4.9%
North Carolina 2.3% 13.3% 11.4% 6.3%
North Dakota 2.6% 13.0% 12.4% 6.8%
Ohio 2.3% 13.0% 11.2% 6.3%
Oklahoma 2.7% 14.4% 13.0% 6.8%
Oregon 1.9% 12.0% 10.4% 6.0%
Pennsylvania 2.6% 13.1% 11.8% 6.7%
Rhode Island 2.0% 12.7% 11.1% 5.7%
South Carolina 2.0% 12.3% 10.2% 5.7%
South Dakota 2.8% 11.6% 12.2% 6.4%
Tennessee 2.3% 13.2% 10.3% 5.9%
Texas 2.2% 14.8% 12.9% 6.8%
Utah 2.1% 12.0% 9.7% 5.5%
Vermont 2.7% 12.3% 11.0% 6.3%
Virginia 2.0% 12.5% 12.5% 6.6%
Washington 2.0% 11.1% 10.2% 6.3%
West Virginia 2.5% 12.3% 10.3% 6.1%
Wisconsin 2.9% 12.8% 11.0% 6.6%
Wyoming 2.7% 12.1% 11.7% 6.5%
Total U.S. 2.2% 13.2% 11.3% 6.3%
Source: NADA Industry Analysis Division

nada.org        NADA DATA 2010 6

The New-Vehicle Department
New-vehicle sales for 2009 were
10.4 million units—down 21.2 per- New-vehicle inventories and days’ supply
cent from 2008’s 13.2 million. Sales
volume during 2010, by contrast, Inventory (in millions) Days’ supply
4.0 80
is running at more than 11 million Total
units in the first four months of 2010 3.5 75
and at nearly 11 million units for the
previous 12 months. Total automaker 3.0 70 Domestic

inventory was lower in 2009 by more

2.5 65
than 1.25 million light vehicles.
Light-truck sales were 47.5 percent 2.0 60
of total light vehicles sold in 2009, Domestic
down from the 48.4 percent of total 1.5 55
Import
new light-vehicle sales in 2008.
1.0 50
Crossover utility vehicles (CUVs) con-
tinued to show relative sales strength, 0.5 45
down just 5.5 percent while all other Import
major categories of vehicles saw sales 0 400
1999 2001 2003 2005 2007 2009 1999 2001 2003 2005 2007 2009
decline by double-digit percentages.
Source: NADA Industry Analysis Division Source: NADA Industry Analysis Division
The average selling price of a new
vehicle, including accessories and
options (“Average Dealership Profile”) New-vehicle sales, by month
decreased in 2008 by 1.5 percent
2009 2009 SAAR* 2008 2008 SAAR* % change
to $28,350 and then improved by Actual (in millions) Actual (in millions) 2008 to 2009
2.2 percent in 2009 to $28,966. January 654,802 9.6 1,039,116 15.2 -37.0%

Of all brands, only Hyundai, Kia, February 687,076 9.1 1,169,217 15.3 -41.2%
March 855,167 9.8 1,351,542 15.1 -36.7%
and Subaru saw sales gains in 2009.
April 817,302 9.3 1,244,386 14.4 -34.3%
Overall, total light-vehicle sales fell by
May 923,830 9.9 1,392,840 14.3 -33.7%
22 percent for the year, but increased
June 857,410 9.7 1,185,435 13.6 -27.7%
by 4.2 percent in the fourth quarter of July 995,667 11.2 1,132,182 12.5 -12.1%
2009, as economic recovery got under August 1,259,996 14.1 1,246,053 13.7 1.1%
way in the second half of the year. September 744,165 9.2 962,427 12.5 -22.7%
October 835,672 10.4 834,752 10.5 0.1%
November 744,349 10.9 743,604 10.1 0.1%
December 1,026,246 11.2 893,072 10.3 14.9%
Full Year 10,401,682 10.4 13,194,626 13.2 -21.2%
*Seasonally adjusted annual rate
Source: NADA Industry Analysis Division

7 NADA DATA 2010        nada.org

 Total light-vehicle sales fell by 22 percent for the year,
but increased by 4.2 percent in the fourth quarter of 2009.

New light-duty vehicle sales, by year Number of new vehicles sold

Total Light-duty
and selling price
Light-duty light-duty trucks New vehicles Average
Year New cars trucks vehicles as % of total sold per retail
1999 8,698,600 8,197,200 16,895,800 48.5% Year dealership selling price
2000 8,846,900 8,502,800 17,349,700 49.0 1999 759 $24,450
2001 8,422,600 8,699,300 17,121,900 50.8 2000 783 24,900
2002 8,103,200 8,714,300 16,817,500 51.8 2001 785 25,800
2003 7,609,800 9,024,900 16,634,700 54.3 2002 774 26,150
2004 7,505,900 9,360,600 16,866,500 55.5 2003 769 27,550
2005 7,666,700 9,278,300 16,945,000 54.8 2004 779 28,050
2006 7,780,800 8,721,000 16,502,700 52.8 2005 788 28,400
2007 7,618,400 8,470,900 16,089,300 52.6 2006 778 28,450
2008 6,813,550 6,381,050 13,194,600 48.4 2007 775 28,800
2009 5,456,300 4,945,400 10,401,700 47.5 2008 659 28,350
Average 1999–2009 7,683,886 8,208,705 15,892,673 51.5% 2009 563 28,966
Source: NADA Industry Analysis Division Source: NADA Industry Analysis Division

New-vehicle sales and market share, by manufacturer

General Other
Year Chrysler Ford Motors Toyota Honda Nissan Volkswagen imports Total
2,638,600 4,115,600 4,974,600 1,475,400 1,076,900 677,900 381,500 1,555,300 16,895,800
1999
15.62% 24.36% 29.44% 8.73% 6.37% 4.01% 2.26% 9.21%
2,522,700 4,147,700 4,911,700 1,619,200 1,158,900 752,800 435,900 1,800,800 17,349,700
2000
14.54% 23.91% 28.31% 9.33% 6.68% 4.34% 2.51% 10.38%
2,273,200 3,915,500 4,852,500 1,741,300 1,207,600 703,700 438,900 1,989,200 17,121,900
2001
13.28% 22.87% 28.34% 10.17% 7.05% 4.11% 2.56% 11.62%
2,205,450 3,576,250 4,815,150 1,756,150 1,247,850 739,850 423,850 2,052,950 16,817,500
2002
13.11% 21.27% 28.63% 10.44% 7.42% 4.40% 2.52% 12.21%
2,127,450 3,437,700 4,716,050 1,866,300 1,349,850 794,800 389,100 1,953,450 16,634,700
2003
12.79% 20.67% 28.35% 11.22% 8.11% 4.78% 2.34% 11.74%
2,206,000 3,271,100 4,657,400 2,060,050 1,394,400 855,000 334,050 2,088,500 16,866,500
2004
13.08% 19.39% 27.61% 12.21% 8.27% 5.07% 1.98% 12.38%
2,304,900 3,106,900 4,456,800 2,260,300 1,462,500 1,076,900 307,250 1,969,450 16,945,000
2005
13.60% 18.34% 26.30% 13.34% 8.63% 6.36% 1.81% 11.62%
2,142,500 2,848,100 4,067,600 2,542,500 1,509,400 1,019,500 325,300 2,047,900 16,502,700
2006
12.98% 17.26% 24.65% 15.41% 9.15% 6.18% 1.97% 12.41%
2,076,100 2,502,000 3,824,550 2,620,800 1,551,550 1,068,500 324,050 2,121,750 16,089,300
2007
12.90% 15.55% 23.77% 16.29% 9.64% 6.64% 2.01% 13.19%
1,447,750 1,942,050 2,955,900 2,217,700 1,428,800 951,450 310,900 1,940,050 13,194,600
2008
10.97% 14.72% 22.40% 16.81% 10.83% 7.21% 2.36% 14.70%
927,200 1,656,100 2,072,200 1,770,200 1,150,800 770,100 296,200 1,758,900 10,401,700
2009
8.91% 15.92% 19.92% 17.02% 11.06% 7.40% 2.85% 16.91%
Average 2,079,259 3,138,091 4,209,495 1,993,627 1,321,686 855,500 360,636 1,934,386 15,892,673
1999–2009 13.08% 19.75% 26.49% 12.54% 8.32% 5.38% 2.27% 12.17%
Source: NADA Industry Analysis Division

nada.org        NADA DATA 2010 8

F&I, Service Contracts
Gross profit margin on the sale Despite improvement in vehicle share at 32.4 percent for 2009, well
of new units was 4.5 percent of the quality and lengthening new-vehi- off the relative peaks of 35 percent in
selling price in 2009, up from 4.4 cle warranties, service contract pen- 1986 and 34 percent in 2004.
percent in 2008, a year made diffi- etration for new vehicles retailed held
cult by volatile gasoline prices. The
recession and falling new-vehicle sales Aftermarket income
worsened in the first half of the year,
As % of new- and used-vehicle department gross profit
even as the credit market improved
30%
somewhat to increase new-vehicle F&I
Total
penetration to 55.7 percent in 2009.
25
Aftermarket income (combined gross
from F&I and service contracts) fell to 20 Service contract and other
25.7 percent of new- and used-vehicle
department gross profit in 2009 from 15
nearly 30 percent in 2008 as custom-
ers economized during the deepening 10
recession. Both F&I and service con-
Finance and insurance
tract penetration rates fell for new and 5
used vehicles combined, as financing
remained difficult for customers with 0
credit rated “Alt-A” and below. 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: NADA Industry Analysis Division

Gross as percentage of
selling price Service contract penetration rates
New vehicles retailed As % of new vehicles retailed
7.0% 40%

35
6.5
30
6.0
25

5.5 20

15
5.0
10
4.5
5

4.0 0
1999 2001 2003 2005 2007 2009 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: NADA Industry Analysis Division Source: NADA Industry Analysis Division

9 NADA DATA 2010        nada.org

The Used-Vehicle Department
New-vehicle dealers sold nearly 15
million used vehicles during 2009. Of
these, 9.1 million vehicles were retailed Used-vehicle sales by new-car dealerships
and 5.8 million were wholesaled. The Average 1999–2009
In millions
average selling price of a used unit 25 Retail. . . . . . . . . . . 11.50
Wholesale. . . . . . . . . 7.40
retailed in 2009 was $14,976, down Total. . . . . . . . . . . . 18.89
slightly from the $15,201 of 2008, Total
as the used-car market faced short- 20

ages of trade-ins. New-vehicle dealers

Wholesale
acquired half of the used units from
15
trade-ins and half from auctions, street
purchases, or other sources. Auctions
accounted for 32 percent of used cars 10
retailed in 1999 and 34 percent in
2009, as other sources such as brokers Retail
5
increased to 11 percent in the difficult
used-car market.
0
Sources of used vehicles 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

retailed by dealerships Source: NADA Industry Analysis Division

By department

2009 Average retail selling price of used vehicles  

Other
retailed by new-car dealerships
11%
Trade-in on $16,000
new vehicle
Auction 30%
purchase 15,000
34%
Trade-in on 14,000
used vehicles
Street 20%
purchase
5% 13,000

1999 12,000
Other
2% 11,000
Auction
purchase 10,000
32% Trade-in on
new vehicle
40% 9,000
Street
purchase 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
4% Trade-in on Source: NADA Industry Analysis Division
used vehicles
22%

Source: NADA Industry Analysis Division

nada.org        NADA DATA 2010 10

Service, Parts, and Body Shop
Tota l fr a nchised de a ler ship
service and parts sales topped $76 bil- Dealerships’ total service and parts sales
lion in 2009, down 6.9 percent from
$82 billion in 2008. Dealers face In billions of dollars

increased competition from indepen- Service labor sales

$20
dent service stations and quick-lube 2008
2009
centers, but continue to attract cus- 16
tomers with competitive pricing and
upgraded facilities. Last year’s service 12

sales saw reduced work because of 8

slower new-vehicle sales and improved
quality. An increase to $91 of the 4
hourly customer-paid mechanical
0
labor rate helped contribute to a 1.9 Customer Customer Warranty Sublet Internal Other
mechanical body
percent overall service and parts rev-
enue increase per-dealer in 2009. Parts sales
Some 73 percent of dealers offered $20
2008
evening service hours, weekend hours, 2009
16
or both, up 2 percent from 2008. But
the average service department was 12
open for business for 54 hours per
8
week in 2009, down from 57 hours
per week in 2008, as the volume of 4
new- and used-vehicle preparation
declined and dealers attempted to rein 0
Customer Customer Wholesale Counter Warranty Internal Other
in costs. mechanical body
Source: NADA Industry Analysis Division
In recent years, more dealerships
have opted out of the body shop busi-
ness. Still, in 2009, 35 percent of deal- Profile of dealerships’ service and parts operations, 2009
erships featured on-site body shops,
Average dealership All dealers
the same percentage as in 2008. Auto Total service and parts sales $4,128,580 $76.21 billion
body work performed by dealerships Total gross profit as percent of service and parts sales 46.24%
fell to $6.6 billion in 2009 (from $7.2 Total net profit as percent of service and parts sales 8.38%
billion in 2008) as some customers Total number of repair orders written 13,884 256 million
Total service and parts sales per customer repair order $217
postponed minor repairs.
Total service and parts sales per warranty repair order $273
Number of technicians (including body) 14 249,926
Number of service bays (excluding body) 17
Total parts inventory $260,448
Average customer mechanical labor rate $91
Source: NADA Industry Analysis Division

11 NADA DATA 2010        nada.org

 In 2009, some 73 percent of dealers offered evening service hours,
weekend hours, or both, up 2 percent from 2008.

Dealerships’ total service   Dealerships’ service   Service department  

and parts sales and parts sales hours of operation
In billions of dollars In billions of dollars
Amount % change 2008 2009 % change Percent of dealership service
departments with:
1998 $63.56 1.0% Service labor sales
1999 67.66 6.5 Customer mechanical $17.58 $16.38 -6.8%
Customer body 4.13 3.75 -9.4 Evening
2000 73.83 9.1
Warranty 5.42 5.44 0.3 hours
2001 80.10 8.5 Neither 6%
Sublet 2.44 1.98 -19.0 evening nor
2002 83.11 3.8 Internal 5.24 4.58 -12.6 weekend hours
2003 85.35 2.7 Other 1.49 1.46 -2.2 27%
2004 85.48 0.2 Total service labor $36.31 $33.58 -7.5% Weekend
2005 85.16 –0.4 hours
Parts sales Both evening 43%
2006 80.45 –5.5 Customer mechanical $12.96 $12.48 -3.7% and weekend
Customer body 3.07 2.86 -6.8 hours
2007 83.35 3.6 24%
Wholesale 13.67 11.05 -19.2
2008 81.84 -1.8
Counter 2.34 2.27 -2.9
2009 76.21 -6.9 Warranty 7.03 7.27 3.4
Source: NADA Industry Analysis Division Internal 3.67 3.06 -16.7 Average hours open per week: 54
Other 2.79 3.65 30.5
Total parts $45.53 $42.63 -6.4%
Total service and parts $81.84 $76.21 -6.9%
Source: NADA Industry Analysis Division Source: NADA Industry Analysis Division

Total dealership body shop sales Dealerships operating  

on-site body shops
In billions of dollars
$11
Percent of total dealership population
65%
10
60
9
55
8
50
7
45
6
40

5
35

4 30
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1999 2001 2003 2005 2007 2009

Source: NADA Industry Analysis Division Source: NADA Industry Analysis Division

nada.org        NADA DATA 2010 12

Employment and Payroll
Fr anchised dealers are major
employers, as well as significant con- Estimated number of employees of new-car dealerships
tributors to their communities’ econo-
In thousands
mies, tax bases, and civic and charita- 1,200 60
ble organizations. In past years, total
dealership employment had remained 55
1,100
above one million individuals, but in 50
2009, dealership closings decreased
employment to 912,600 employees 1,000 45

from 1,057,500 in 2008. 40

The number and types of employ- 900
Total of all dealerships (left scale) 35
ees vary significantly among dealer-
Average number per dealership (right scale)
ships, depending on store characteris- 800 30
tics such as size, location, makes han- 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: NADA Industry Analysis Division
dled, and distribution of sales among
departments. Total dealership employ-
ment count in 2009 was estimated as Estimated number of new-car dealership  
follows: employees in 2009, by state
New- and used-vehicle Total number Average number Total number Average number
  salespeople..........................171,724 State all dealers per dealership State all dealers per dealership
Alabama 12,389 39 Montana 3,522 29
Technicians............................ 249,926 Alaska 1,978 62 Nebraska 6,945 36
Service and parts workers Arizona 17,259 74 Nevada 5,893 57
Arkansas 7,664 32 New Hampshire 5,960 40
  (other than technicians)..... 277,480
California 93,153 69 New Jersey 28,862 57
Supervisors, general office Colorado 13,719 52 New Mexico 5,537 44
  workers, and others............ 213,469 Connecticut 12,588 45 New York 48,118 51
Delaware 3,238 56 North Carolina 26,683 44
Total...................................... 912,600
Florida 56,702 66 North Dakota 3,371 37
Georgia 25,009 47 Ohio 38,276 47
The average dealership in 2009
Hawaii 3,750 60 Oklahoma 16,593 58
employed 49 people and had an annu- Idaho 4,089 37 Oregon 10,173 41
al payroll of $2,354,000. The payroll Illinois 40,726 49 Pennsylvania 46,202 46
for all dealerships was $43.5 billion, Indiana 19,072 42 Rhode Island 2,964 53
Iowa 12,007 36 South Carolina 11,718 42
and represented almost 13 percent of Kansas 9,626 40 South Dakota 3,411 31
the nation’s total retail trade payroll. Kentucky 11,665 42 Tennessee 16,843 45
Louisiana 12,855 42 Texas 71,572 58
Maine 5,567 40 Utah 7,109 51
Maryland 21,656 69 Vermont 2,689 31
Massachusetts 21,632 51 Virginia 27,981 57
Michigan 28,847 42 Washington 17,793 51
Minnesota 14,403 37 West Virginia 5,599 38
Mississippi 6,307 30 Wisconsin 20,771 38
Missouri 20,225 47 Wyoming 1,888 29
Source: NADA Industry Analysis Division Total U.S. 912,600 49

13 NADA DATA 2010        nada.org

Annual payroll of   Average weekly earnings of 2009 annual payroll of new-car
new-car dealerships dealership employees dealerships, by state
Total all Average per
$ billions $ thousands dealerships dealership
55 2,700 $1,000 State ($ billions) ($ millions)
Alabama $0.54 $1.68
Alaska 0.09 2.91
50 Arizona 0.87 3.74
2,400 900
Arkansas 0.32 1.35
California 4.89 3.60
45
Colorado 0.69 2.60
2,100 800
Connecticut 0.69 2.47
40 Delaware 0.15 2.65
Florida 2.78 3.22
1,800 700 Georgia 1.19 2.24
35 Hawaii 0.20 3.18
Idaho 0.18 1.58
Total of all dealerships 1,500 600
(left scale) Illinois 1.93 2.34
30
Average per dealership Indiana 0.79 1.73
(right scale) Iowa 0.49 1.47
25 1,200 500 Kansas 0.42 1.72
1999 2001 2003 2005 2007 2009 1999 2001 2003 2005 2007 2009 Kentucky 0.49 1.79
Source: NADA Industry Analysis Division Source: NADA Industry Analysis Division
Louisiana 0.59 1.95
Maine 0.24 1.72
Maryland 1.06 3.38

Average weekly earnings of new-car dealership   Massachusetts

Michigan
1.17
1.38
2.75
1.99
employees in 2009, by state Minnesota 0.62 1.61
Mississippi 0.27 1.26
Alabama $ 836 Montana $ 754 Missouri 0.90 2.12
Alaska 903 Nebraska 798 Montana 0.14 1.12
Arizona 967 Nevada 1,073 Nebraska 0.29 1.49
Arkansas 812 New Hampshire 970 Nevada 0.33 3.17
California 1,006 New Jersey 1,109 New Hampshire 0.30 2.02
Colorado 965 New Mexico 842 New Jersey 1.67 3.28
Connecticut 1,049 New York 1,011 New Mexico 0.24 1.91
New York 2.54 2.67
Delaware 912 North Carolina 848
North Carolina 1.18 1.97
Florida 939 North Dakota 779
North Dakota 0.14 1.50
Georgia 916 Ohio 799
Ohio 1.60 1.96
Hawaii 1,008 Oklahoma 851 Oklahoma 0.74 2.57
Idaho 828 Oregon 858 Oregon 0.46 1.83
Illinois 911 Pennsylvania 823 Pennsylvania 1.98 1.98
Indiana 791 Rhode Island 955 Rhode Island 0.15 2.63
Iowa 787 South Carolina 830 South Carolina 0.51 1.83
Kansas 833 South Dakota 797 South Dakota 0.14 1.30
Kentucky 808 Tennessee 882 Tennessee 0.77 2.09
Louisiana 885 Texas 981 Texas 3.66 2.95
Utah 0.33 2.34
Maine 816 Utah 879
Vermont 0.12 1.35
Maryland 943 Vermont 838
Virginia 1.32 2.67
Massachusetts 1,037 Virginia 902
Washington 0.86 2.47
Michigan 915 Washington 925
West Virginia 0.20 1.39
Minnesota 825 West Virginia 702 Wisconsin 0.78 1.42
Mississippi 809 Wisconsin 716 Wyoming 0.08 1.27
Missouri 856 Wyoming 855 Total U.S. $43.45 $2.35
Source: NADA Industry Analysis Division Total U.S. $ 916 Source: NADA Industry Analysis Division

nada.org        NADA DATA 2010 14

Vehicles in Operation and Scrappage
At the end of 2009, there were old in 2009. Low sales as the reces- government promotion of new vehicle
about 239 million light vehicles in sion began to recede, even given the purchases, boosted the average age of
operation and 248 million vehicles. additional scrappage involved with cars and trucks during 2009.
In the 10 years before 2009, the total
light-vehicle fleet had increased by an
Vehicles in operation–scrappage, by year
average of 2 percent each year. NADA
Total vehicles New vehicle Scrappage as %
estimates that, in 2009, the median in use registrations Scrappage of registrations
age for cars was 9.4 years and for light 1999 209,509,161 16,130,124 11,663,602 72.3%
trucks, 8.1 years. 2000 213,299,313 18,088,911 14,298,759 79.0
Scrappage—the difference between 2001 216,682,936 17,505,343 14,121,720 80.7

sales and the growth of the vehicle 2002 221,027,121 17,639,934 13,295,749 75.4
2003 225,882,103 16,939,662 12,084,680 71.3
population—was an estimated 14.6
2004 232,167,136 17,419,471 11,134,438 63.9
million units in 2009, up by almost
2005 239,384,168 17,287,680 10,070,648 58.3
1 million units from 2008. NADA 2006 244,642,610 17,332,357 12,073,915 69.7
Industry Analysis estimates that the 2007 248,700,997 16,765,603 12,707,216 75.8
average vehicle on the road, a higher 2008 249,812,723 15,127,946 14,016,220 92.7
measure than median, was 10.2 years 2009* 248,418,026 13,965,371 15,360,068 110.0%
*Covers 15 months of market activity (7/1/08 – 9/30/09) in order to capture the most recent behavior available.  Source: R.L. Polk & Co.

Total vehicles in  
operation, by year Average age of passenger cars, Estimated vehicle  
trucks, and light trucks, by year scrappage
In millions
300 Total cars and trucks
12
In millions Percent
Cars
16 120%
Light trucks Number of vehicles
250 All light vehicles
Total scrapped during year
15 (left scale) 110
11
200 14
100
Trucks 13
150 90
10
12
80
100 11
70
Cars 9 10
50
60
9
Scrappage as % of 50
0 8 new-vehicle registrations
8
1999 2001 2003 2005 2007 2009* (right scale)
1999 2001 2003 2005 2007 2009*
7 40
*Covers 15 months of market activity (7/1/08 – 9/30/09) in
order to capture the most recent behavior available.
*Covers 15 months of market activity (7/1/08 – 9/30/09) in 1999 2001 2003 2005 2007 2009
order to capture the most recent behavior available.
Source: R.L. Polk & Co.
Source: R.L. Polk & Co. Source: R.L. Polk & Co.

15 NADA DATA 2010        nada.org

Total light vehicles in operation in 2009, by state
Passenger Light Trucks Total Passenger Light Trucks Total
State cars GVW 1–3  vehicles State cars GVW 1–3  vehicles
AK 187,473 416,672 604,145 MT 376,935 603,105 980,040
AL 1,969,615 2,269,842 4,239,457 NC 3,812,136 3,982,462 7,794,598
AR 997,315 1,417,967 2,415,282 ND 288,916 389,025 677,941
AZ 2,357,015 2,754,763 5,111,778 NE 766,971 912,888 1,679,859
CA 14,081,157 12,170,425 26,251,582 NH 609,449 594,332 1,203,781
CO 1,909,693 2,409,396 4,319,089 NJ 2,898,051 2,199,546 5,097,597
CT 1,604,991 1,170,941 2,775,932 NM 634,384 836,602 1,470,986
DC 149,274 68,354 217,628 NV 928,430 1,002,045 1,930,475
DE 374,495 323,812 698,307 NY 6,038,909 4,823,626 10,862,535
FL 7,338,630 6,473,618 13,812,248 OH 5,125,217 4,458,105 9,583,322
GA 3,565,199 3,899,660 7,464,859 OK 1,535,573 1,918,081 3,453,654
HI 442,402 503,695 946,097 OR 1,519,973 1,734,577 3,254,550
IA 1,357,897 1,516,542 2,874,439 PA 5,020,747 4,545,726 9,566,473
ID 632,514 902,955 1,535,469 RI 499,702 334,219 833,921
IL 5,224,688 4,558,469 9,783,157 SC 1,904,020 2,069,863 3,973,883
IN 2,566,414 2,711,865 5,278,279 SD 356,159 467,678 823,837
KS 1,163,021 1,371,461 2,534,482 TN 2,322,114 2,618,896 4,941,010
KY 1,702,470 1,926,809 3,629,279 TX 8,735,621 11,026,280 19,761,901
LA 1,498,466 2,101,311 3,599,777 UT 1,027,572 1,138,138 2,165,710
MA 2,695,264 2,059,862 4,755,126 VA 3,647,532 3,401,303 7,048,835
MD 2,571,360 2,095,924 4,667,284 VT 298,288 302,014 600,302
ME 506,028 556,393 1,062,421 WA 2,808,975 2,891,863 5,700,838
MI 3,920,259 4,048,832 7,969,091 WI 2,574,385 2,530,396 5,104,781
MN 2,240,339 2,255,593 4,495,932 WV 637,651 805,876 1,443,527
MO 2,414,205 2,616,881 5,031,086 WY 200,218 392,704 592,922
MS 1,115,394 1,324,911 2,440,305 Total 119,153,506 119,906,303 239,059,809
Source: AutoCount data from Experian Automotive as of December 31, 2009. | www.experianautomotive.com | (888) 853-3307

Total new-vehicle registrations in 2009, by state

State 2009 2008 2007 2006 State 2009 2008 2007 2006
Alabama 130,316 182,697 223,480 232,666 Montana 33,738 41,300 49,944 46,787
Alaska 23,135 30,890 31,016 32,155 Nebraska 58,551 68,105 75,380 71,679
Arizona 190,311 286,873 377,996 419,204 Nevada 75,559 123,354 177,227 192,413
Arkansas 89,729 113,935 131,402 128,258 New Hampshire 60,548 76,447 84,304 97,145
California 1,035,823 1,401,305 1,871,132 2,086,931 New Jersey 430,278 532,241 611,572 602,437
Colorado 155,825 215,712 255,466 252,000 New Mexico 61,168 87,172 107,505 106,234
Connecticut 126,601 157,375 192,054 189,950 New York 684,528 798,624 870,323 847,727
Delaware 28,449 40,106 49,922 53,379 North Carolina 261,759 345,428 434,165 443,149
D.C. 19,692 16,148 20,995 18,612 North Dakota 22,866 26,343 27,019 25,319
Florida 701,488 950,695 1,241,454 1,416,862 Ohio 397,180 487,357 563,468 563,813
Georgia 265,567 366,012 466,284 499,669 Oklahoma 358,127 322,361 362,883 336,895
Hawaii 58,669 72,335 96,917 107,727 Oregon 89,858 124,860 162,753 170,512
Idaho 31,005 43,939 59,738 63,270 Pennsylvania 477,031 557,525 682,697 661,787
Illinois 457,072 560,424 654,387 663,428 Rhode Island 37,144 43,564 52,974 55,157
Indiana 174,871 226,921 251,149 279,154 South Carolina 120,104 168,687 209,066 210,321
Iowa 94,921 109,005 117,485 118,466 South Dakota 24,499 28,319 32,860 33,374
Kansas 84,456 100,982 113,370 114,433 Tennessee 159,102 227,556 277,901 272,329
Kentucky 105,370 124,430 153,544 152,761 Texas 858,973 1,192,701 1,390,745 1,302,253
Louisiana 160,623 217,459 262,688 286,369 Utah 72,703 98,467 122,332 122,521
Maine 45,253 51,019 52,872 57,946 Vermont 28,148 33,260 37,936 38,287
Maryland 240,834 284,436 360,195 376,039 Virginia 280,333 337,651 427,456 445,841
Massachusetts 249,513 289,280 332,090 344,490 Washington 166,976 225,226 285,385 291,249
Michigan 415,951 570,907 646,485 693,741 West Virginia 57,512 71,318 80,352 80,963
Minnesota 152,559 220,239 259,924 268,358 Wisconsin 165,241 199,855 232,224 242,574
Mississippi 67,895 93,700 116,226 132,168 Wyoming 18,961 26,057 30,138 29,059
Missouri 201,868 238,975 280,499 286,714 Total U.S. 10,308,683 13,209,577 16,007,379 16,564,575
Source: R.L. Polk & Co.

nada.org        NADA DATA 2010 16

Advertising and the Dealership
Fr anchised dealers spent more
than $5.4 billion on advertising in Advertising expenditures, by medium
2009. Dealership ad expenses fell by
Percent of total
14.4 percent. In the past 10 years, the 1999 2009
amount of a dealership’s ad budget Internet Other
4.8% 6.9% Other
allocated to newspapers dropped by 10.3%
Direct mail Newspaper
30 percentage points, though many 7.1% 22.4%
newspapers provide linked Internet Newspaper
Internet
Television 22.2%
advertising. Radio increased by 1 per- 51.9% Radio
15.6%
14.9%
centage point and TV by more than 4
Direct mail
percentage points. Dealers now spend Radio 10.1% Television
13.7% 20.1%
more than 22 percent of advertising
dollars on the Web, up from 4.8 per- Source: NADA Industry Analysis Division
cent in 1999 and 9.9 percent in 2005.

Total dealership advertising

Total dealership advertising Per new unit sold
expenditures $700

In billions of dollars 600

$10

500
9

400
8

300
7 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: NADA Industry Analysis Division

6
Estimated advertising expenses per dealership in 2009
5 By number of new units sold
Average of all 750 or
By media used dealerships 1–149 150–399 400–749 more
4 Newspapers $65,473 $23,753 $36,410 $72,865 $146,923
1999 2001 2003 2005 2007 2009 Radio 43,443 14,292 30,025 41,203 97,060
Source: NADA Industry Analysis Division TV 58,628 12,294 32,961 91,021 174,660
Direct mail 29,483 7,375 16,251 43,721 87,360
Internet 64,915 22,914 36,444 87,849 131,612
Other 30,068 9,122 18,957 39,917 63,444
Total $292,010 $89,749 $171,048 $376,576 $701,061
Total advertising as a
  % of total sales 1.11% 1.13% 1.10% 1.13% 1.03%
Total advertising per
  new vehicle sold $661 $842 $638 $544 $426
Source: NADA Industry Analysis Division

17 NADA DATA 2010        nada.org

Consumer Credit
Average new-vehicle loan rates at
finance companies averaged 3.82 per- Average finance rate on new-car loans
cent during 2009, a rate last seen dur-
12%
ing 2003. Bank rates averaged 6.72 Finance companies
percent in 2009, down from 7.02 per- 10 Banks
Average prime rate
cent in 2008. The average prime rate
8
was 3.3 percent, a 30-year low.
6

4
Average maturity of new-car
loans at finance companies 2
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Note: The bank series represents the average of direct 48 month loans.
2002 56.9 months The finance company series represents the average of all loans made. Source: Federal Reserve Board

2003 61.4
2004 60.5
2005 60.0 New-vehicle affordability measure
2006 62.3 Avg. finance Avg. length Avg. consumer Median family Avg. weeks of median
2007 61.0 rate loan expenditure* income family income to buy car*
2008 63.4 2004Q1 3.73% 59.56 months $22,508 $53,543 24.4
2009 62.0 2004Q2 4.50 60.62 22,909 53,888 25.1
Source: Federal Reserve Board 2004Q3 6.03 61.13 23,110 54,234 25.8
2004Q4 5.40 61.48 23,373 54,579 25.7
2005Q1 5.29 59.46 23,558 55,394 25.3

Consumer credit outstanding 2005Q2

2005Q3
5.59
6.31
59.19
60.41
23,836
24,312
55,927
56,461
25.4
26.2
2005Q4 6.91 61.12 24,956 56,994 27.0
End of year, seasonally adjusted
In millions of dollars 2006Q1 6.09 61.90 24,649 57,577 26.0
$3,000 2006Q2 5.63 61.82 24,673 58,130 25.6
Nonrevolving 2006Q3 3.03 65.41 24,833 58,684 24.2
Revolving 2006Q4 5.23 62.97 25,559 59,237 26.0
2,500 2007Q1 4.98 61.27 25,106 60,250 24.9
2007Q2 5.08 61.70 25,133 60,987 24.7
2007Q3 4.85 62.13 25,665 61,724 24.8
2,000
2007Q4 4.55 62.93 25,239 62,461 24.1
2008Q1 4.85 62.60 23,112 61,459 22.7
1,500 2008Q2 5.28 63.50 22,801 61,500 22.5
2008Q3 4.87 65.40 23,410 61,542 22.9
2008Q4 7.09 62.30 22,855 61,583 23.4
1,000
2009Q1 4.71 59.30 22,811 60,427 22.3
2009Q2 3.45 62.13 23,587 60,697 22.5
500 2009Q3 3.66 62.70 22,714 60,434 21.9
2009Q4 3.47 63.90 23,988 60,689 23.1
2010Q1 4.31 62.93 24,120 61,028 23.4
0 *With possible rebate Sources: Comerica Bank; Commerce Department; Federal Reserve
1999 2001 2003 2005 2007 2009

Source: Federal Reserve Board

nada.org        NADA DATA 2010 18

New-Truck Dealerships
Sales of medium- and heavy-duty
trucks (Classes 4-8), according to
Ward’s Automotive, dropped from Number of medium- and heavy-duty truck dealerships
298,424 units in 2008 to 199,686 in As of January 1, 2010
3,000
2009, a 33.1 percent decline. Market
shares changed somewhat in medium-
duty sales last year, as Hino gained 2,750

sales volume and share in Class 4. In

Class 6, Isuzu and Nissan Diesel gained 2,500

sales volume and market share.

Class 8 sales dropped 29 percent in 2,250

2009, and no manufacturer had a sales

volume increase. Freightliner (27.3 2,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
percent share) and International (28 Source: American Truck Dealers

percent share) gained relative market

share in this difficult sales year by
keeping sales declines below 24 per-
U.S. retail sales and market share–calendar year 2009
cent. Kenworth kept the sales drop to
Truck classes 4–8
26.5 percent to move up to a 12.3 per- Percent of
cent share of Class 8 sales from 11.9 Class 4 5 6 7 8 Total market
International 480 840 10,050 14,867 26,581 52,818 26.5%
percent last year. Inventory rebuilding
Freightliner 1,895 249 4,310 11,764 25,884 44,102 22.1
in U.S. retailing, as the U.S. economy Ford 10,025 10,556 3,093 2,928 0 26,602 13.3
rebounds, should assist Class 8 sales Peterbilt 0 65 120 2,654 12,277 15,116 7.6
somewhat during 2010. Kenworth 0 80 554 2,379 11,652 14,665 7.3
Mack 0 0 0 0 7,626 7,626 3.8
Volvo Truck 0 0 0 0 7,066 7,066 3.5
GMC 1,642 2,506 353 1,941 0 6,442 3.2

Truck categories Sterling

Chevrolet
849
2,189
809
2,670
427
264
756
690
2,984
0
5,825
5,813
2.9
2.9
Trucks are classified by gross vehicle weight Dodge 0 4,202 0 0 0 4,202 2.1
Class 1 0 – 6,000 lb. Isuzu 2,039 1,128 219 144 0 3,530 1.8
Class 2 6,001 – 10,000 Hino 58 236 1,974 712 0 2,980 1.5
Class 3 10,001 – 14,000 Mitsubishi Fuso 591 385 265 42 0 1,283 0.6
Class 4 14,001 – 16,000 Nissan Diesel 90 216 372 210 0 888 0.4
Class 5 16,001 – 19,500 Western Star 0 0 0 0 708 708 0.4
Class 6 19,501 – 26,000 Other 0 0 0 0 20 20 0.0
Class 7 26,001 – 33,000 Total 19,858 23,942 22,001 39,087 94,798 199,686 100.0%
Class 8 33,001 lb. and over Source: © 2010 Ward’s Communications

19 NADA DATA 2010        nada.org

Dealership Financial Trends
Recessions usually cause negative
net profits in the new-vehicle depart- New-vehicle department net profit
ment. After the average dealership’s
Average dealership, in thousands of dollars, including F&I
new-vehicle profits increased from
$200
2001 through 2004, 2005 brought the
150
start of a significant decline in new-ve-
100
hicle profitability. From 2006 through
50
2009, the new-vehicle department post-
0
ed increasing net yearly losses, prompt-
-50
ing lower new-vehicle inventories and
-100
advertising spending to control costs.
-150
Lower floor-plan costs, resulting from
-200
Federal Reserve policy, and relatively 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
modest energy costs assisted dealership Source: NADA Industry Analysis Division

new-vehicle sales in 2009.

Used-car sales, typically profitable Used-vehicle department net profit
on a net basis, sprang back to net prof-
Average dealership, in thousands of dollars, including F&I
itability in 2009, after a small net loss
$200
in used-car profits in 2008 caused by
volatile gasoline prices.
150
Total service and parts profits
moderated as service and parts rev- 100
enue per-dealer rose by 1.9 percent in
2009. Service and parts gross margins 50
improved slightly, but departmental
expenses increased as a portion of de- 0
-10
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
partmental sales.
Source: NADA Industry Analysis Division
Total typical dealership revenue
fell 7.5 percent in 2009, while the net
number of dealership closings sur- Service and parts department net profit
passed 1,500 during the year. The re- Average dealership, in thousands of dollars
turn of future dealership profits in new $500
vehicles remains dependent on growth
400
of revenue in new- and used-vehicle
sales. Dealers continue to compete 300
with a large segment of independent
service outlets to service older vehicles. 200

Per-dealer service and parts sales grew

100
by a modest 1.9 percent in 2009 as
the number of new-car dealerships de- 0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
creased during the year. Source: NADA Industry Analysis Division

nada.org        NADA DATA 2010 20