Industry forecasts suggest dealerships may face one of their most challenging operating environments in 2026, with new-vehicle sales softening, affordability pressures rising, and operating costs continuing to climb. On the latest episode of Driving Solutions, Tony Wanderon, CEO of EasyCare (an APCO Holdings brand), shares how dealers can protect profitability and position their businesses for long-term stability as market conditions grow more complex.
Margin compression is emerging as one of the most significant pressures facing dealers. Rising vehicle prices combined with declining sales volume place strain on both front-end and back-end gross, while labor, technology, compliance, and flooring costs continue to rise. To counter these pressures, disciplined inventory management becomes essential. Dealers who avoid overstock situations, optimize pricing strategies, and closely manage flooring expenses are better positioned to preserve margins in a tighter market.
Affordability challenges are also reshaping consumer behavior. Longer loan terms and extended ownership cycles are becoming increasingly common, pushing customers to hold vehicles well beyond traditional timelines. This shift creates meaningful opportunities for dealers to deepen relationships throughout the ownership lifecycle. As vehicles stay on the road longer, demand for service, maintenance, and protection products increases, making retention a critical driver of long-term profitability.
Service contracts play a measurable role in strengthening retention. Data shows that customers without service contracts return to the dealership at significantly lower rates, while those who purchase protection products are far more likely to remain engaged over time. By addressing the total cost of ownership upfront and helping customers avoid unexpected repair expenses, dealers create value that extends well beyond the initial sale and encourages repeat business.
"The backbone of long-term profitability and building loyalty in fixed-ops starts with delivering consistency and a strong ownership experience."
Used vehicles continue to represent a growing share of dealership sales, making differentiation increasingly important. Third-party and factory certification programs help reduce friction in the buying process while providing added protection and confidence for consumers. Certification also allows dealers to stand apart from private-party sellers, particularly in a market where quality used inventory remains difficult to source. Both independent and factory-backed certifications offer value, though each carries distinct benefits that dealers must evaluate based on their inventory mix and customer needs.
As dealership groups continue to consolidate, certification programs also support brand consistency across rooftops. When dealer groups manage multiple franchises, certification helps reinforce a unified ownership experience and keeps customers connected to the broader organization rather than a single store.
F&I operations are undergoing a necessary shift from a transactional, product-driven model to a value-based experience centered on customization and transparency. Modern data and technology enable dealers to tailor product offerings to individual customer needs, usage patterns, and ownership expectations. The focus is no longer on maximizing short-term revenue, but on delivering solutions that keep customers engaged for years.
Technology alone, however, is not enough. Effective F&I performance depends on training, ethics, and customer-focused execution. Teams must be equipped to support in-store, remote, and hybrid transactions while maintaining clarity and trust throughout the process. A strong product lineup paired with the right administrative partners helps reinforce consistency and profitability across the dealership.
Fixed operations remain one of the most stable and influential revenue streams in the retail automotive industry. Long-term profitability is closely tied to the service experience, where convenience, transparency, and communication play critical roles. Accurate time estimates, clear pricing, digital inspections, and simplified scheduling help build trust and encourage repeat visits.
Data-driven engagement further strengthens retention by allowing dealers to anticipate customer needs and deliver timely, relevant messaging. When service communication aligns with customer expectations and ownership behavior, it increases both satisfaction and spend over time. With the average vehicle age now exceeding 13 years, fixed operations have become central to sustaining dealership revenue and customer loyalty.
Consistency across sales, F&I, and service is essential. A breakdown in the service experience can quickly erode trust built during the sales process, undermining prior investments in retention. The most successful dealerships align all departments around a shared ownership experience that reinforces value at every touchpoint.
APCO Holdings continues to invest heavily in fixed operations training as part of its broader focus on dealer profitability. Through its acquisition of DealerPRO, the company strengthens its commitment to developing service advisors, technicians, and fixed-operations leaders. Modern service training emphasizes relationship-building, transparency, and long-term customer value over short-term transactional gains.
Ultimately, dealership success in 2026 will depend on adapting to changing consumer behavior while maintaining operational discipline. By prioritizing retention, investing in people and processes, and focusing on the full ownership experience, dealers can protect profitability even in a more challenging market environment.
