Auto Dealer Ad Spending Hits First-Half Record.

Local auto dealers are spending more on advertising even as they sell fewer vehicles, pushing their marketing outlays to a new first-half record.

The National Automobile Dealers Association says franchised dealerships spent $5.04 billion on advertising during the first six months of 2026, up 5% from $4.80 billion a year earlier. It was the most ever spend by auto dealers on ads during the first half, topping the previous record set last year. It also continues a sharp rebound from the pandemic-era low of $3.6 billion in 2020 when supply chains and closed storefronts upended the marketplace.

The increase is particularly notable because it comes as the auto market has cooled. Franchised dealers sold 7.9 million light-duty vehicles during the first half, while new light-vehicle sales fell 2.6% from a year ago. The average dealership also saw revenue decline 0.9% as both new- and used-vehicle volumes slipped.

“This decline was expected at the start of the year, and our expectation remains that dealers will sell 16.0 million new light-vehicle units in 2026,” NADA Chief Economist Patrick Manzi says in the trade group’s midyear report.

The $5.04 billion spent on advertising during the first half also puts dealers on pace to again approach $10 billion in annual advertising expenditures if second-half spending remains at similar levels. That would challenge the record $9.96 billion spent in 2025 as dealers continue to look toward marketing to help overcome higher tariffs and an uneven economy to help drive sales.

NADA says franchised dealers sold 7.9 million light-duty vehicles during the first half of 2026, with total dealership sales topping $640 billion. That compares with 8.1 million vehicles and more than $645 billion in sales during the first half of 2025.

Service and parts operations helped offset those modestly lower sales. NADA says dealers wrote more than 136 million repair orders in the first half, down slightly from more than 137 million a year ago, while service and parts sales increased 2.4% to nearly $83 billion, from more than $81 billion during the first half of 2025.

The combination of higher advertising spending and fewer sales pushed the amount dealers spent on advertising for each new vehicle sold to $791. That is up nearly 10% from $722 last year and 46% above the $541 spent per vehicle in 2021. As recently as 2024, dealers were spending $692 per vehicle sold.

Dealers are spending more on marketing even as consumers face increasingly expensive vehicles. The average retail selling price of a new vehicle at a franchised dealership rose to $48,990 during the first half, up 2.1% from $47,971 a year ago. At the same time, the average dealership sold 464 new vehicles, down from 477 during the first half of 2025.

Inventory conditions have also stabilized after the disruptions that helped shape the market last year. New light-vehicle inventory ended June at 2.7 million vehicles, up 1.6% year over year.

“Inventory should hover around this level for the rest of the year,” Manzi says. “We expect year-end inventory in 2026 to be flat compared to 2025.”

One significant shift is occurring in the types of vehicles consumers are buying. The expiration of the federal electric-vehicle tax credit at the end of September 2025 has meant battery-electric vehicle sales have weakened while conventional hybrid have continued to gain ground. Hybrid sales increased 22.4% through September, raising their share of the new-vehicle market to 15.6%, up 3.1 percentage points from a year earlier.

Service Department Stays Strong

While vehicle sales overall has softened, dealerships are getting more business from other parts of their operations. Service and parts sales reached nearly $83 billion during the first half, up from $81.08 billion a year ago. Dealers wrote more than 136 million repair orders.

Overall, NADA’s mid-year update shows franchised dealerships generated $640.77 billion in sales during the first six months, compared with $645.66 billion during the same period last year. New vehicles accounted for 53.6% of dealership sales dollars, down from 54.2%, while service, parts and body shop operations increased their share to 13.6%.

NADA notes that comparisons over long periods come with a caveat because its methodologies and data sources have changed over the years. But the latest numbers show dealers putting more money behind advertising even as new-vehicle sales have softened and the advertising cost associated with each vehicle sold has climbed sharply.