The first half of 2025 was a period of significant uncertainty for America’s franchised auto dealerships. After entering the year with optimism, they faced new tariffs, shifting inventory levels and an economic climate that has vehicle affordability top of mind. Despite these struggles, the industry demonstrated remarkable strength, achieving major milestones in sales and revenue. The National Automobile Dealers Association (NADA) Mid-Year 2025 report paints a detailed picture of a resilient industry that continues to innovate and grow.
A Strong First Half Driven by Resilience
America’s 16,972 franchised light-vehicle dealerships had a blockbuster first half of the year, selling 8.1 million light-duty vehicles. This impressive volume translated into total sales exceeding $645 billion, a testament to the industry’s economic power. On average one dealership generated about $38 million in sales, showcasing a healthy and robust business model.
Beyond vehicle sales, the service and parts departments continued to be a cornerstone of dealership operations. Dealers wrote more than 137 million repair orders, and service and parts sales topped $81 billion. In such a turbulent year, the consistent performance of service highlights the crucial role that fixed operations play in maintaining dealership stability.
New Vehicle Market: Tariffs and Inventory Shifts
We’re surely all tired of hearing about it at this point, but the defining feature of the first half of 2025 was the impact of new tariffs on imported vehicles and auto parts. The surprise policy spurred a rush of consumer activity in March and April, as buyers moved to purchase vehicles before anticipated price increases took effect. This pull-ahead effect resulted in higher-than-normal sales rates during those months and had a direct impact on new vehicle inventory.
Inventory levels, which started the year at 2.82 million units, declined to 2.6 million by the end of June. This 6.6 percent decrease was a direct consequence of the tariff fueled sales surge. While inventory was expected to grow throughout the year, NADA now forecasts that it will end 2025 at around 2.5 million units.
Despite these shifts, the new vehicle department performed well. The average dealership sold 477 new vehicles in the first half of the year, up from 461 in the same period of 2024. The average selling price of a new vehicle also edged higher, reaching $47,971. The trend toward light-duty trucks continued to strengthen, with trucks and SUVs accounting for 82.2 percent of all new light-duty vehicle sales, up from 80.7 percent a year prior.
Used Vehicle and Fixed Operations Performance
Used vehicles remain a vital contributor to dealership success, perhaps more now than ever. Franchised dealers sold 6.74 million used vehicles in the first half of 2025, a slight increase from the previous year. The average selling price for a used vehicle saw a small increase to $28,602 from $28,300 in 2024, as the segment continues to represent a significant portion of dealership revenue, accounting for 32.6 percent of total sales dollars.
Meanwhile, the service and parts department contributed a significant 13.2 percent of total sales dollars. Total sales for this department reached $81.08 billion. The average customer-pay repair order was $470, indicating steady consumer spending on vehicle maintenance and repair. With over 275,000 technicians employed across the country, the service drive remains a critical engine of employment and profitability for the industry.
A Look at Consumer Financing Trends
The NADA report, incorporating data from Experian, also provides valuable insights into how consumers are financing their vehicle purchases. In the second quarter of 2025, the average amount financed for a new vehicle was $41,983, a slight increase of about $1,000 from the previous year. For used vehicles, the average amount financed was $26,795.
Interest rates remained a key factor for consumers. The average interest rate for a new vehicle loan was 6.80%, while the rate for a used vehicle loan was significantly higher at 11.54%. To manage higher vehicle prices, consumers continued to opt for longer loan terms. Loans of 73-84 months made up 29.2 percent of all new vehicle financing, up from 27.1 percent in Q2 2024. This pushed the average monthly payment for a new vehicle to $749 and a used vehicle to $529.
In terms of lender market share, captive finance companies continued to dominate new vehicle financing, accounting for 52.4 percent of the market. However, this was a decrease from 60.7 percent a year earlier, with banks and credit unions picking up additional share.
The Road Ahead for America’s Dealers
The first half of 2025 has shown that America’s franchised dealers are well-equipped to handle anything the market can drop on them at this point. Looking forward, the industry will continue to navigate the effects of trade policies, manage inventory levels, and adapt to evolving consumer behaviors. The data from the first half of the year provides a positive outlook, demonstrating that through strategic management and a focus on all areas of the business—from new and used sales to fixed operations—dealerships are poised for continued success.
“In the face of change, America’s franchised dealers have always been innovators,” said Patrick Manzi, Chief Economist, NADA. “And recent years have shown that dealers are resilient and can respond to any challenge that comes their way.”
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