Study: Used Car Profit Gap Closing
A survey of 250 U.S. franchised dealerships revealed a 21% drop in the gross-margin gain between new- and used-vehicle sales as off-lease units flooded the market in 2017.


Used-car owners are 50% less likely to visit their selling dealership for service and 25% less likely to buy another car from that dealership, according to AutoLoop. Illustration by Yonkers (N.Y.) Honda via Flickr
CLEARWATER, Fla. — The gross margin gap between the sale of used and new vehicles dropped 21% in 2017. And that's despite the share of used-car sales rising from 40.2% in 2016 to 40.7% last year, according to a new report.
The report, “The Impact of Used Car Sales on Your Service Drive," was released today by marketing, sales and service solutions provider AutoLoop LLC. It summarizes the company’s analysis of used-vehicle sales data from more than 250 franchised dealerships.
“This is both good and bad news for auto dealers,” said Doug Van Sach, AutoLoop’s vice president of analytics and data services. “The good news is we’re seeing increased opportunities to sell more vehicles. The bad news is that the gap between new and used profit is shrinking as more off-lease vehicles flood the market.”
“If this trend continues,” Van Sach explained, “dealers will see their service business gradually erode as fewer customers make the journey from the showroom to the service drive.”
Used owners are 50% less likely to visit the dealer for maintenance and repairs, and they are 25% less likely to return to a dealer to buy another car. Because of this, dealers who rely solely on a manufacturer’s retention marketing program are particularly vulnerable to losing used-vehicle service business, as many of these programs ignore used-vehicle owners.
One possible solution? Van Sach suggests dealers develop a separate customer retention and marketing program for their used vehicle customers. “Make used customers aware of your service value proposition, and offer them targeted service specials based on their unique needs.”
Visit AutoLoop at Booth 5038C at the NADA convention in Las Vegas.
More F&I

How AI-Powered Coaching Is Transforming F&I Performance
See how AI-powered coaching can turn F&I customer conversations into actionable insights that support compliance, performance and profitability
Read More →
Sell Value, Build Trust
In this video, Trent White explains why selling on value, not fear, builds lasting customer trust, reduces cancellations, and drives long-term success.
Read More →
F&I Sales Give Dealers First-Half Lift
Product business shored up total profits to avoid an overall revenue tanking as product penetrations held steady, StoneEagle reported.
Read More →
Targeted Training Drives Results
Today’s technology, instead of threatening F&I managers, can actually make them better, according to an industry veteran who’s watched market setbacks roil the unprepared.
Read More →
Double the Change, Double the Chance
When an F&I manager gets a customer refusal, it’s a wise move to tweak more than one thing in the product offering.
Read More →
Just Do It
F&I managers need training, but instead of resisting application or expecting perfection, they should improve by simply acting on what they learn.
Read More →
Dealer Lender Preferences Revealed
When lenders provide consistent, fast service, their overall satisfaction scores with dealers greatly improve, according to JD Power research.
Read More →
Leading with Purpose
In this video, Trent White explains how understanding your people’s 'why' is a key leadership responsibility of F&I professionals and how that mindset drives dealership engagement, trust and performance.
Read More →
Integrating Nontraditional F&I Products
The niche presents a strategic advantage for auto dealerships as they move to adapt to fast-changing consumer expectations in today’s market.
Read More →
Trust Is Personal
Technology, no matter how efficient, can’t replace what the human F&I manager can do, which is to bridge the divide between cyberspace and the in-store experience.
Read More →