Profit-wise, 2001 was the best year for car dealers in 15 years, according to the Dallas Morning News. Lavish automaker incentives dramatically increased retail sales at a time when dealers, anticipating a slump, had cut costs. The result: In 2001, pre-tax margins at the average new car dealership rose to 2 percent of revenue, up from 1.6 percent in 2000, according to the National Automobile Dealers Association (NADA).

The last time dealers saw a higher profit margin was 1986, when it averaged 2.2 percent, the association said.

While sales cooled in the first quarter of this year, many dealers are putting their windfall profits back into their businesses, expanding

existing stores or building new ones. "If they aren't investing in their franchises after the three best sales years in history, you have

to ask: When will they?" said Paul Taylor, the dealer association's chief economist.

"We had such an unusual combination of events last year that we really can't expect again," Mr. Taylor said.

Some dealers may feel that their windfall last year was a turnaround in a tough business, says George Hoffer, an economist at Virginia Commonwealth University who studies the auto industry. Fifteen years ago, dealers often earned a 12 percent to 15 percent profit margin on new cars and trucks.