U.S. auto dealers experienced their best profit levels in 15 years last year, according to the National Automobile Dealers Association (NADA).

NADA said the average dealership pretax profit in 2001 was $618,974, on $31.7 million in revenues. That compares with a profit of $455,924 on revenues of $29.4 million the year before.

Profit margins jumped dramatically year to year. Pretax profit rose to 2.0 percent of revenue last year, the best pretax margin since 2.2 percent in 1986. In 2000, the pretax

margin was just 1.6 percent, according to NADA.

Low interest rates helped dealers control the cost of floorplanning, according to industry analysts. Also helping with higher profits were the hefty boost in new-car sales due to zero percent financing; a robust used-car market; higher revenues in the parts and service department; and more efficient use of the Internet, according to NADA.

Although overall expenses rose 8 percent,

the interest dealers paid to finance their inventory - perpetually one of their biggest expenses - dropped by one third to an average of $103 per vehicle in 2001. That's down from $154 per vehicle in 2000.

Dealers also are making better use of the Internet, according to Dr. Paul Taylor, NADA's chief economist. NADA research indicates dealerships with at least four years of online sales experience can more than double their closing rates from Internet-related leads. In addition, dealers who do business-to-business transactions online have cut costs by getting more competitive prices from their suppliers, according to Taylor.

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