It’s been a full and busy year for The Presidio Group, with the firm advising on several significant transactions nationwide. On today’s episode of Inside Automotive, Presidio President George Karolis shares the company’s recent wins and insights from the latest Presidio-NCM Average Dealership Performance Benchmark report.
Published quarterly in partnership with NCM, the report draws on data from over 4,000 dealerships. It’s released shortly following the close of each quarter, providing timely insights into dealership profitability and trends.
Key takeaways from the Q3 report
Overall profits are trending upward, with an average increase of about 7% year-over-year. New-vehicle margins, however, remain under pressure, down approximately 15%, reflecting ongoing normalization. The used-vehicle segment saw softer results. F&I stood out with a 7% quarter-over-quarter increase, driven primarily by higher warranty costs and lower borrowing rates.
Floorplan expenses decreased roughly 50%, as dealers exercised more disciplined inventory management, and advertising expenses also declined.
Fixed-ops
Fixed operations continue to grow, particularly among public companies, while private companies showed softer performance. Last year, private dealer fixed-ops results were inflated by 12% due to the CDK Global outage in June 2024, which shifted some sales and profits into Q3. RO counts remain essentially flat, likely impacted by rising labor costs and operational pressures.
While mobile fleets do not yet significantly boost a dealership’s valuation, Karolis foresees consumer demand for mobile services increasing and recommends that dealers continue to focus on expanding this type of service.
F&I
Finance and insurance profits increased 7% year-over-year during the third quarter, with over $1,666 per unit. Higher warranty costs, coupled with lower borrowing rates, contributed to the increase, highlighting the continued importance of F&I to overall profitability.
Significant transactions and market insights
This year, The Presidio Group facilitated 15 transactions, including several high-profile deals: the sale of Fletcher Jones Mercedes and Audi in Chicago to AutoNation; Stivers Subaru in Decatur, Georgia, to Lithia Motors; and Hendrick Honda Woodbridge in Virginia to Ourisman Automotive Group. Karolis notes that it remains a seller’s market, with more buyers than sellers. Despite this advantage, deals must be rational, with sellers maintaining realistic expectations of their dealership’s value.
"Whether it's a seller's market or buyer's market, the demand from dealers for assets to grow is there."
Portfolio optimization has become a key strategy among the best-in-class dealers. Even dealers with expanding operations sometimes prune underperforming stores to focus resources effectively.
Three of Presidio’s recent large transactions involved sellers who are typically buyers, divesting lower-performing stores to reallocate resources. Public companies occasionally reach a cap on the number of dealerships they can operate, prompting the sale of lower-performing locations.
Industry trends and outlook
Industry consolidation is expected to continue, particularly in metropolitan areas where costs and competition are high. Rural and smaller markets may see less impact. There’s also growing positivity around Nissan and Stellantis brands, especially among private dealership groups. Dealers are evaluating risk-adjusted opportunities, and increased demand for these brands may present strategic growth opportunities.
Looking ahead, Presidio expects a strong close to 2025, with several deals in the pipeline and a record number anticipated in the first quarter of 2026.
