Because the dealer is the bank, their cash is tied up in the cars sitting in customers' driveways.

At the end of 2025, 60+ day delinquencies reached an all-time high of 6.65% .

Top-tier independent dealers have historically reported over $1.2 million in annual pre-tax profit.

Dealers often mandate "Collateral Protection Insurance" (CPI) or specialized GAP coverage , which can account for 20%–30% of total annual profit . 2. Current Profitability Metrics (2025–2026)

While gross margins are high, operating costs are steep. Benchmark reports for 2024–2025 show net income before taxes typically lands between 2% and 6% after accounting for bad debt and high overhead.

Recent data shows that while the industry is stabilizing after pandemic-era peaks, it remains highly lucrative: