Tim Pohanka, executive vice president and chief operating officer of Pohanka Nissan Hyundai in Fredericksburg, Virginia, told reporters that service is now the "biggest opportunity" for dealers as margins on new-car sales tighten.
Why service is taking centre stage
During the pandemic, limited vehicle supply let dealers command high prices and enjoy record profits. Today, inventory levels have normalised and competition has intensified, pushing average pretax profit per public dealer from $6.8 million in 2022 to about $3.9 million in 2025, according to a Kerrigan Advisers study cited by CNBC.
In response, dealers are leaning on their service bays. The National Automobile Dealers Association reports that total service and parts sales have risen 48 percent over the past five years, reaching $164.6 billion last year. Independent chains such as Jiffy Lube and Meineke now attract 42 percent of American drivers for routine maintenance, up from 20 percent in 2020, a trend highlighted by consulting firm Ducker Carlisle.
How dealers are trying to win customers back
Pohanka's group offers walk-in appointments, financing options for repairs and a video update for every serviced vehicle. These measures aim to counter the perception that dealer service is overpriced by emphasising factory-trained technicians, specialised equipment and direct access to manufacturer data.
Longer vehicle lifespans also extend the service window. The Bureau of Transportation Statistics notes that the average age of a passenger car on US roads rose to 14.5 years last year, compared with 11.5 years a decade earlier.
What this means for the future
Dealers hope that a satisfied service experience will translate into future car purchases. Pohanka says customers who regularly visit a dealership for maintenance are more likely to buy their next vehicle from the same outlet.
With new-vehicle listing prices hovering around $49,249 and transaction prices at $49,855, a 1.9 percent increase year-on-year, according to Kelley Blue Book, the pressure to keep customers in the showroom is unlikely to ease.
Industry data from Cox Automotive shows the US inventory of new vehicles held by dealers remained steady at about 2.73 million units in early August, suggesting a move toward a healthier balance between supply and demand.
Looking ahead, dealers are expected to deepen their service offerings, invest in digital tools such as online scheduling and vehicle-condition videos, and possibly expand financing for routine maintenance. If successful, these strategies could stabilise earnings even as the car-selling side of the business faces ongoing challenges from tariffs, supply-chain disruptions and shifting consumer preferences.