The largest dealership groups in the U.S. are homing in on affordability in the service drive to boost customer retention as vehicle sales and front-end margin decline.

Four of the six top publicly traded dealership groups increased their same-store service and parts gross profit in the third quarter. The growth came as overall new-vehicle sales fell at all six auto retailers, and same-store gross profit per new vehicle declined at five. Sonic Automotive’s same-store gross profit per new vehicle was flat from a year earlier.

Some of the groups in the U.S. are discounting services and hiring more technicians to bolster service and parts profits.

Franchised dealerships and independent shops compete on basic offerings such as oil changes and tire work. Every customer that a franchised dealer wins for a basic service can lead to more work later, said David Whiston, a senior autos analyst at Morningstar Equity Research.

Service and parts are profit centers in dealerships and “if you can get that customer in, there’s an opportunity upsell,” Whiston said. “There’s also an opportunity to possibly convince them to sell the vehicle, and that’s cheaper than going to auction to get used-vehicle inventory.”

How service and parts impacted publicly traded dealership groups

Service and parts same-store gross profit made up between 43 and 51 percent of the public dealership groups overall gross profit in the third quarter; AutoNation and Asbury Automotive relied on the segment the most in the third quarter, and Lithia Motors the least.

Asbury, of Atlanta, ranks No. 5 on on Automotive News’ list of the top 150 dealership groups based in the U.S., with retail sales of 181,204 new vehicles in 2025.

Meanwhile, the publics had mixed results across new and used vehicles and finance and insurance sales. Front-end dealership margins are shrinking across the industry, pushing more dealership groups to home in on service and parts profits for financial consistency.

Group 1 Automotive’s new- and used-vehicle profit margins fell on pressures in the third quarter, but “aftersales continued to provide stability to our earnings,” CFO Daniel McHenry said in a third quarter earnings call with investors Oct. 28.

Group 1 ranks No. 4 on Automotive News’ 2026 list of the top 150 dealership groups based in the U.S., retailing 224,166 new vehicles in 2025.

At Penske Automotive, more expensive parts, higher labor rates, technology in the service drive and more complex vehicles drove higher same-store service and parts revenue, the company said in a third-quarter government filing. Penske is in the process of becoming a private company and did not hold a call with investors this quarter.

Penske Automotive Group, of Bloomfield Hills, Mich., ranks No. 2 on the top 150 list, retailing 259,502 new vehicles in 2025.

Multiple public dealership groups noted that higher repair costs drive customers away from franchised stores. Jeff Dyke, president of Sonic, said in an Oct. 29 earnings call with investors that about half of customers go to independent shops.

“We’ve got the best facilities, we’ve got the best technicians, we’ve got the training, the tools, the equipment, OEM-certified parts, certified technicians,” Dyke said. “There’s no reason for them not to come back to us, but we’re fighting that image of high-priced service drives.”

Sonic, of Charlotte, N.C., ranks No. 6 on the top 150 list, retailing 115,981 new vehicles in 2025.

Leadership at Lithia encourages stores to stay affordable in the service lane, CEO Bryan DeBoer said in an Oct. 21 call with investors. For example, dealerships can offer aftermarket and non-OEM parts to price-sensitive customers, DeBoer said.

Lithia Motors Inc., of Medford, Ore., ranks No. 1 on the top 150 list with sales of 382,921 new vehicles in 2025.

Some consumers delay getting work done because of cost, but deferred work is not lost if stores get the customer to come back eventually, AutoNation CEO Mike Manley said in an Oct. 30 call with investors.

AutoNation, of Fort Lauderdale, Fla., ranks No. 3 on the top 150 list, retailing 259,264 new vehicles in 2025.

Group 1, Sonic and Lithia all bolstered affordability and customer retention through low-priced offerings. Lithia sells lifetime oil contacts and Group 1 will finance customers for high repair bills.

Group 1 also started selling oil changes for $17.76 in June and “it drove over 36,000 customers into our shops,” many of whom bought more than an oil change, CEO Daryl Kenningham said in an Oct. 28 call with investors.

Public dealership groups need more technicians to win more customers

The public auto retailers want to continue to grow their parts and service businesses, but the companies need more skilled technicians.

“Dealers want to have that service operation contributing to its maximum potential,” Whiston said, “because that helps in both good times and bad.”

Group 1’s recent acquisition of Hennessy Automobile Cos. in Atlanta added 500 service bays and 280 technicians, Kenningham said. The auto retailer also updated its technician mentorship program and increased technician productivity by 7.2 percent in the third quarter, he said.

Sonic has the service space in its dealerships to hire more technicians, but the dealership group does not want to bring on techs too fast, Dyke said.

It takes time to train them to “our culture, our process, the way we do things,” he said.