The oil change is the trade: dealer profit is migrating from the lot to the service bay

Dealership service and parts sales reached $164.6 billion last year, up 48% over five years, according to the National Automobile Dealers Association ^[3]. Over the same period the average profit at publicly traded dealership groups fell sharply from its 2022 peak ^[5][6], which means the question for anyone holding auto retail is no longer what a new car earns but what a returning customer earns.

The front-end story is simple. Kerrigan Advisers, cited by CNBC, put average pretax profit per public dealership at $6.8 million in 2022, more than triple the $1.9 million of 2018 ^[5]. For 2025, the same work puts average gross profits at public-company stores at about $3.9 million ^[6]. Those are not the same line item, so the move from 6.8 to 3.9 is directional rather than arithmetic ^[7]. The direction is not in dispute: supply has moved closer to demand and competition among sellers has increased ^[19], and Cox Automotive counted about 2.73 million new vehicles on dealer lots at the start of August, essentially flat year over year, describing the market as possibly moving toward a healthier balance between inventory and demand ^[8].

Prices, meanwhile, have not broken. Kelley Blue Book put the average new-vehicle listing at $49,249 at the end of July and the average transaction at $49,855, up 1.9% from a year earlier ^[9], which is roughly $606 of transaction above listing ^[10]. High prices with thinner gross is the signature of a seller that has lost pricing power without getting volume relief in exchange.

Which brings the analysis to the bay, where dealers are not defending a position so much as trying to recover one. Ducker Carlisle found 42% of Americans named a chain such as Jiffy Lube, Meineke or Walmart as their primary service provider in 2025, up from 20% in 2020 ^[2]: a 22 point swing, more than a doubling, in five years ^[18]. Those chains compete on oil changes, filter checks, tire rotations and light repairs with flexible scheduling, and have passed dealerships as the default choice for American vehicle service ^[17].

The offsetting tailwind is the fleet itself. The average passenger car on US roads was 14.5 years old last year against 11.5 years a decade earlier, per the Bureau of Transportation Statistics ^[11], which is three additional years, about 26% more usable life, over which each vehicle generates work ^[12].

Tim Pohanka, executive vice president and chief operating officer of Pohanka Nissan Hyundai in Fredericksburg, Virginia, told Fortune that compressed new-car margins have made service "the biggest opportunity" ^[13]. His stores take walk-in appointments, offer financing on service work, and send a video of the full vehicle with every job ^[14]. He also argues that service customers are more likely to buy their next car from him ^[15], and treats recurring service revenue as ballast against disruptions from tariffs to supply chain problems ^[16]. The financing detail deserves attention on its own terms: when repair work is sold on payment plans, the binding constraint is the customer's cash, not their willingness to book.

What to watch is whether the share number stops moving. Dollar growth in dealer service can coexist with continued share loss when the car fleet is aging and repair prices are rising, so the next Ducker Carlisle read matters more than the next NADA total ^[2][3][11]. Second, watch whether the 48% five-year growth rate in service and parts holds as its base gets larger, since it implies roughly $111 billion five years ago ^[3][4]. Third, watch whether transaction prices keep printing above listing prices, because that gap closing is what turns normalized margins into compressed ones ^[9][10].