At a Glance
For auto dealerships across New England, 2025 was a year of recalibration. The pace of change in vehicle technology, consumer expectations, and dealership operations accelerated, creating both uncertainty and opportunity. Dealers faced new challenges in workforce management, inventory planning, and digital transformation—all while navigating shifting economic conditions and evolving manufacturer requirements. This year’s top developments reflect how the region’s dealerships are adapting to a rapidly changing marketplace and positioning themselves for sustainable success in 2026.
Contents
- Electrification and the Changing Vehicle Mix
- Digital Retailing and Shifting Customer Behavior
- Consolidation and Ownership Transitions
- Used-Car Market Pressures and Service Revenue Shifts
- Labor, Affordability, and Economic Headwinds
- The Road Ahead
Electrification and the Changing Vehicle Mix
Electric and hybrid vehicles gained ground in New England in 2025, but the landscape shifted after the 2024 election. Federal EV credits ended, some manufacturers scaled back their strategies, and a few discontinued EV programs entirely—prompting dealers to reassess timelines and investments. Consumer interest remained steady, and regional policy still favored lower-emission options, but momentum varied by brand and market.
For dealerships, the transition became more cautious and uneven. Stores that had already invested in charging infrastructure and technician training were better prepared for fluctuating demand, while others faced inventory uncertainty, floorplan pressure, and evolving OEM expectations. The shift is ongoing but far from linear; dealers need flexible plans that account for policy, market behavior, and manufacturer volatility.
Key takeaway: Build and communicate an adaptable, right-sized “EV-ready” plan that supports sales, parts, service, and technician development without overcommitting ahead of market confirmation.
Digital Retailing and Shifting Customer Behavior
Customers increasingly expect dealership experiences that mirror other online purchases: seamless, transparent, and fast. In 2025, more buyers completed large portions of the sales process remotely—from virtual trade-ins to digital financing. Dealers that integrated their websites, CRM tools, and DMS platforms gained efficiency and customer trust. However, the transition also exposed gaps in staff training and system compatibility. Balancing personal service with digital convenience became a key competitive differentiator. The dealerships that flourished blended strong in-store relationships with intuitive online tools that made buying simple.
Key takeaway: Audit your online retail and customer-relationship systems, then invest where needed to deliver a consistent omnichannel experience.
Consolidation and Ownership Transitions
The wave of consolidation continued across New England in 2025 as regional dealer groups expanded and national players entered the market. Rising operating costs, estate planning concerns, and favorable valuations encouraged many single-store owners to consider selling. Larger networks benefited from scale in marketing, compliance, and inventory management, while independent dealers sought ways to stand out through community focus and personalized service. For dealership owners, 2025 underscored the need for clear succession planning and awareness of their business’s true market value.
Key takeaway: Revisit your ownership or exit strategy—whether your goal is to grow, merge, or prepare for transition, start with a professional valuation and plan.
Used-Car Market Pressures and Service Revenue Shifts
Used-vehicle inventory remained tight in 2025 as supply constraints carried over from prior model years. Dealers relied more heavily on trade-ins and auction purchases, while consumer affordability concerns pushed many buyers toward pre-owned models. Meanwhile, service and parts operations became critical profit drivers, offsetting thinner margins on new-car sales. Fixed operations also played a greater role in customer retention as warranty and maintenance programs evolved. Dealerships that prioritized efficient reconditioning and retention-driven service programs enjoyed steadier income amid unpredictable vehicle supply.
Key takeaway: Strengthen your service and parts departments as long-term profit centers and monitor used-car supply to stay agile with pricing and sourcing.
Labor, Affordability, and Economic Headwinds
The broader economy in 2025 posed challenges for dealerships and customers alike. Technician shortages persisted, wage pressures rose, and consumer credit remained tight due to high interest rates. Buyers stretched loan terms to manage payments, while affordability concerns dampened demand for higher-priced vehicles. Dealerships that adapted compensation structures, invested in technician training, and diversified finance offerings weathered these challenges best. Economic cycles will continue, but operational flexibility and focus on customer trust are the best tools for long-term stability.
Key takeaway: Review compensation, training, and financing structures to maintain workforce strength and customer access in a tighter economy.
The Road Ahead
The 2025 auto retail landscape proved that adaptability is the cornerstone of resilience. New England dealerships navigated complex transitions—from electrification to digital transformation—while maintaining their community roots. The coming year will reward those who plan ahead, invest in technology and people, and build transparent, lasting relationships with customers. Despite the challenges, one message is clear: progress belongs to those who prepare for it.
Bart Haag joined ARB in 1996 and is a Principal with the firm. The growth of ARB’s Auto Dealership Group is a natural result of consistently anticipating the needs of dealerships and providing savvy, sensible and customized services at fair prices.
