Auto Drives $4.8 Billion Into Ads: Hit Record Ad Spend In First Half.

Consumers pressured by higher prices and a market increasingly driven by wealthier Americans snapping up pricier models has led local car dealers to spend record amounts of money this year on advertising. Dealers invested 8% more into ads during the first half of 2025 compared to a year ago, according to the National Automobile Dealers Association.

The trade group says franchised dealership spent a combined $4.8 billion on advertising compared to $4.46 billion a year earlier. It was the most ever spend by auto dealers on ads during the first half, topping the previous record of $4.68 billion spent in 2017. The total also continued a continuation of the recovery in the sector since the pandemic upended the car market and auto ad spending crash to a low of $3.6 billion during the first half of 2020.

If ad spending continues on its current projection, the year-end totals will approach the records of nearly a decade ago when local dealer spending peaked at $9.82 billion in 2016.

NADA says franchised dealers sold 8.1 million cars and light-duty trucks during the first half of the year, with sales topping $645 million. That compares to 7.8 million units sold during the first half of 2024.

Car sales weren’t the only place dealerships were making money either. NADA says they also wrote more than 137 million repair orders — 4 million more than last year — with service and parts sales up 7% year-to-year to more than $81 billion.

The mid-year update shows a dealership marketplace in flux. NADA says in first-half 2025, new light-vehicle inventory declined as the months passed and tariffs took effect. The number of cars on dealer lots totaled 2.82 million when the year began. But at the end of June, inventory totaled 2.6 million units, a decline of 6.6%.

“The implementation of tariffs on imported vehicles and auto parts was the primary driver of this decline as many consumers rushed to dealer lots to make a purchase in March and April before the tariffs took effect,” says Patrick Manzi, Chief Economist at NADA. “This resulted in abnormally high sales rates for March and April.” He said NADA now expects new light-vehicle inventory will end 2025 around 2.5 million units.

Those inventory levels have a direct impact on how much is spend on marketing. NADA reports for every car or truck sold during the first half of the year, dealerships spent an average of $722 on advertising. That is up a third % increase from the $541 low point recorded in 2021.

Despite the uncertainty that tariffs have brought to the car industry, the impact varies from brand to brand — and there hasn’t been any general downturn that some had feared.

“In just the few first months of this new trade policy, we have not seen much change in the average dealership’s business,” Manzi says. “The average dealership through the first half of 2025 has seen increased revenue and throughput.”

The twists in the business road that dealerships navigated during the pandemic may even be helping today, according to Manzi “In the face of change America’s franchised dealers have always been innovators,” he says. “And recent past years have shown that dealers are resilient and can respond to any challenge that comes their way.”