There are more than 16,500 new vehicle dealerships in the U.S.
There are currently more than 16,500 franchised new-vehicle dealerships in the United States, many of which are independent establishments operated by individuals, families or small retail groups.
Competition in the industry is among automotive retailers, both public and private, as well as with other used car retailers.
According to data from Cox Automotive, there were an estimated 36.2 million used vehicle transactions in 2022.
To put in context, a 2022 NADA Auto Retailing market summary showed that the U.S. auto industry generated approximately $1.2 trillion in sales in 2021.
The industry benefits from entrenched vehicle ownership trends among U.S. consumers, with approximately 283 million registered vehicles on the road in 2022, and about 91.9% of households in the U.S. owned at least one vehicle in 2021.
In addition, the used vehicle retail market in general has demonstrated resilience through recessionary markets and other difficult economic cycles.
The U.S. used vehicle market is highly fragmented. Companies face the following competitors:
- According to Vroom, this includes traditional new and used car dealers, large national dealerships, such as CarMax and AutoNation, that have expanded into online sales, including “omnichannel” offerings, and used car dealers or marketplaces that have e-commerce business models or online platforms, such as Carvana, Shift, or CarBravo.
- Auto finance companies with online e-commerce businesses, such as Chase Auto Preferred and CapitalOne Auto Navigator.
- The peer-to-peer marketplace, which uses sites such as Facebook, Craigslist.com, eBay Motors, and Nextdoor.com, and consignment websites such as CarLotz.
- Sales by car rental companies directly to consumers of used vehicles formerly used in rental fleets, such as Enterprise Car Sales.
The U.S. used vehicle market is ripe for disruption, as it is an industry notorious for consumer dissatisfaction and has one of the lowest levels of e-commerce penetration.
Among all used vehicle sales in 2021, the largest U.S. used vehicle dealer had a market share of approximately 2%, with the top 100 used vehicle dealers collectively accounting for only 11%, according to Automotive News.
Industry reports estimate that e-commerce penetration will increase to half of all used vehicle sales by 2030.
Reflecting the shift in consumer behavior toward online shopping, in the Cox Automotive Digitization of End to End Retail Study 2021, 80% of consumers said they wanted to conduct at least part of their vehicle purchase online and 64% of car buyers said they wanted to handle more of their purchase online compared to the last time they purchased a vehicle.