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<ul class="summary-list"><li>Prices for used and new cars have soared to ridiculous heights. </li><li>That's not great for buyers, but it's fantastic for the country's biggest dealership groups. </li></ul><p>You or I might wince at the notion that the average new car will now run you <a href="https://www.businessinsider.com/used-new-car-prices-surging-chip-shortage-2021-10">more than $45,000</a>. But the country's biggest <keyword id="12419745" type="UNKNOWN" weightage="60" keywordseo="car-dealers" source="Orion">car dealers</keyword>? They're loving it. </p><p>The same bloated prices that are <a href="https://www.businessinsider.com/when-will-car-prices-go-down-used-vehicles-chip-shortage-2021-9">frustrating buyers</a> are fueling record profits for the largest dealership groups in the US. </p><p><keyword id="12419746" type="UNKNOWN" weightage="60" keywordseo="autonation" source="Orion">AutoNation</keyword>, the country's largest dealer of new cars with over 300 locations, <a href="https://investors.autonation.com/news-and-events/press-releases/press-release-details/2021/AutoNation-Reports-Sixth-Consecutive-All-Time-Record-Quarter/default.aspx">posted profits</a> of $361.7 million for the quarter ended September 30, roughly double its net income from the same period of 2020. <keyword id="10909317" type="UNKNOWN" weightage="60" keywordseo="lithia-motors" source="Orion">Lithia Motors</keyword>' <a href="https://www.prnewswire.com/news-releases/lithia--driveway-lad-increases-revenue-70-eps-47-and-adjusted-eps-63-record-third-quarter-performance-301404205.html">profits</a> are up 94% year-over-year, and its third-quarter revenue of $6.2 billion represents a 70% jump over last year. </p><p><keyword id="12419747" type="UNKNOWN" weightage="60" keywordseo="penske-automotive-group" source="Orion">Penske Automotive Group</keyword>, which deals in consumer vehicles and other <keyword id="11894924" type="UNKNOWN" weightage="100" keywordseo="transportation" source="Orion">transportation</keyword> services, has <a href="https://www.prnewswire.com/news-releases/penske-automotive-reports-all-time-record-quarterly-results-301409541.html">made</a> $876.1 million in income so far this year, a 155% increase over the same nine months in 2020. </p><p>While these three mega dealers only represent <a href="https://www.autonews.com/dealers/top-5-dealer-groups-keep-spots-next-5-shuffle">some 500,000</a> of the roughly 14.5 million vehicles sold in the US last year, their financial statements provide a rare look under the hood at dealer economics as the pandemic upends vehicle production and sales. </p><p>Their profits are surging despite a <a href="https://www.businessinsider.com/why-are-used-cars-so-expensive-now-shortages-pandemic-rentals-2021-7">computer-chip shortage</a> that's dealt a huge blow to vehicle manufacturing worldwide. The supply of new cars has plummeted across the board, but dealers have <a href="https://www.businessinsider.com/used-cars-shortage-prices-dealers-describe-bizarre-world-upended-business-2021-7">made a killing</a> on the vehicles they're able to sell. Big margin increases have offset stagnating sales volumes.</p><p>The average new vehicle in the US is trading for close to $300 above sticker price, according to Edmunds, helping dealers eke out a larger profit on every vehicle sold. </p><p>During the third quarter, AutoNation made close to $5,500 on each new car sold, more than triple its profits per vehicle during the same period in 2019. In the third quarter of 2020, Lithia's stores made an average of $2,900 on each new car they moved. This year the figure has almost doubled. </p><p>Dealers have also gotten a boost as limited availability of new cars fuels booming demand for secondhand vehicles. AutoNation's used-vehicle volumes rose 20% this quarter, while used-vehicle revenue soared 53%. Lithia's same-store used-vehicle revenues are up 40% year-over-year. </p><p>Amid surging profits and sales, all three of the country's largest car dealers have been on a buying spree, gobbling up smaller groups to expand their footprints. </p><p>AutoNation in October said it's buying nine luxury dealerships in a deal that's expected to boost annual revenue by $420 million. Lithia has added 56 locations in 2021, including 34 through a single acquisition. Penske recently completed its takeover of a Japanese luxury dealership group. </p><p><a href="https://www.businessinsider.com/will-used-car-prices-drop-2023-chip-shortage-2021-10">How long</a> will the tight inventories, inflated prices, and huge appetite for cars last? Industry watchers say the supply of new vehicles won't rebound for at least the next year, and AutoNation's outgoing CEO Mike Jackson agrees. </p><p>"Consumer demand continues to outpace supply, driven by consumer desire for personal transportation and ongoing manufacturer supply-chain disruption. We expect this to continue well into 2022," Jackson said during a <a href="https://www.businessinsider.com/reviews/out?u=https%3A%2F%2Fwww.fool.com%2Fearnings%2Fcall-transcripts%2F2021%2F10%2F21%2Fautonation-inc-an-q3-2021-earnings-call-transcript%2F">recent call</a> with investors, adding that low inventory levels and pent-up demand "should support sales for the foreseeable future."</p><p>Customers, meanwhile, are left with no room to haggle, limited selection, and hurting wallets. </p>

It's a terrible time to buy a car, but a great time to sell them

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image"><p class="source"><span>Flickr/Andrew Malone</span></p></div><p></p></div></div>Sidney DeBoer, executive chairman of auto-dealer Lithia Motors, is retiring at the end of the year.</p><p>But DeBoer will still get paid $1.05 million a year for the rest of his life, paid in $252,600 quarterly cash installments.</p><p>The <a href="http://www.footnoted.com/lithia-motors-emperor-for-life/">folks over at Footnoted on Friday highlighted</a> the <a href="http://www.sec.gov/Archives/edgar/data/1023128/000143774915017405/ex10-1.htm">lifetime compensation agreement</a> between DeBoer and the company - <a href="http://www.dailytidings.com/article/20150917/NEWS/150919844">which he founded in 1968 and took public in 1996</a> - effective January 1, 2016.</p><p>DeBoer also gets a $42,000-a-year car allowance paid for by the company.</p><p>DeBoer stepped down as CEO in May 2012, handing the job over to his son, Bryan. <a href="http://www.dailytidings.com/article/20150917/NEWS/150919844">According to the Mail Tribune</a> of Medford, Oregon, DeBoer still works 60 to 70 hours a week and "handles 300 emails a day."</p><p>Lithia is based in Medford and, in 2014, recorded revenue of $5.4 billion.</p><p>And as Footnoted pointed out, DeBoer is still the controlling shareholder in the company, owning about 52% of the company's voting shares.</p><p><strong><a href="http://www.footnoted.com/lithia-motors-emperor-for-life/">Read the full report at Footnoted here »</a></strong></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/rolls-royce-new-customized-bespoke-mdoels-phantom-ghost-auto-show-2015-4">Rolls-Royce redefines luxury with these 3 new customized models</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="15d3NndDpYE6jIO-ulbugoexSLQSoPHH" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

The retiring founder of an auto dealer will get $1 million a year for the rest of his life

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It's a terrible time to buy a car, but a great time to sell them

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The retiring founder of an auto dealer will get $1 million a year for the rest of his life

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