Auto Dealer Ad Spending Rises, But Tariffs Could Stall Progress.

New tariffs may be throwing the car buying marketing into a period of uncertainty, which could require more dealer advertising to help shoppers sort things out. It comes as the National Automobile Dealers Association reports dealers increased their ad spending four percent last year to $9.22 billion.

NADA, which represents the nation’s 16,957 franchised car and light truck dealers, shows an auto industry that has largely returned to normal. Last year’s ad spending was the most invested in marketing in five years, and returns spending to nearly the $9.25 billion level seen pre-pandemic in 2019. It also marks a $1.74 billion increase since the low point in advertising was recorded in 2020.

The nation’s 16,835 franchised dealers sold 15.9 million light-duty vehicles last year, a 2.6% increase from a year earlier, as sales topped $1.2 trillion, according to NADA’s annual tally. It says the average new car selling price was $47,652, up $638 from a year earlier. NADA also reports that local dealers sold 12.8 million used cars last year for an average $28,431. And local dealerships wrote more than 270 million repair orders, a 2% increase year-to-year, with service and parts sales totaling more than $156 billion.

“More available inventory meant consumers didn’t have to wait as long to secure a new vehicle as they did during the past several years,” says NADA Chief Economist Patrick Manzi. In the trade group’s annual report, he says the industry average days’ supply at the end of 2024 totaled 47 days, an increase of six days from year-end 2023.

Ad spending is closely timed to the incentives that dealers promote, and there NADA delivers good news. “As inventory levels have grown so, too, has OEM incentive spending,” Manzi says. “Inventory levels vary by OEM, and those with more available inventory are likely to have higher incentive spending in 2025.” According to J.D. Power, average incentive spending per unit totaled $3,356 in December 2024, up 27.5% year over year.

While the total $9.22 billion spent on advertising was the most this decade, overall advertising levels still lags what local dealers allocated to marketing prior to the pandemic. NADA says dealership advertising peaked in 2016 when $9.82 billion was spent to reach consumers.

NADA says the average dealer spent $705 on advertising for each new vehicle sold last year. That was a drop of three dollars from a year earlier, and the second consecutive year of decline. But the spending level still easily surpassed the $640 spent per vehicle in pre-pandemic 2019. The low point was $582 in 2020.

Dealers once flooded television airwaves with ads, but that is no longer the case. Nearly three-quarters (73%) of dealer ad dollars went to digital media last year. The biggest portion went to third-party listing sites, which captured more one in five dollars spent, followed closely by search engine marketing. Another 12.7% went to social media advertising.

NADA says radio’ share of dealer ad money slipped to 7.5% last year, down two points from a year earlier, to total $691.5 million. Television share rose slightly to 10.9%, totaling just over $1 billion, and newspaper’s share fell to 1.9%, or $175 million. Direct mail also saw some share gains last year, rising to 6% of total ad spending, or $553 million.

NADA estimates the typical new car dealership spent $543,539 on advertising last year, a three percent increase from a year earlier. Radio’s share of that total averaged $40,765—down from $50,248 in 2023. The typical dealer spent $59,246 with local television stations. But the average for both are less than was spent in each of the biggest digital channels. The report says dealers spent an average $60,030 on social media advertising last year.

Car and light trucks sales in March were the best monthly sales numbers in nearly four years according to NADA, as customers rushed to dealer lots to purchase vehicles before tariffs on imported vehicles took effect. Sales were up 13.3% year-to-year and up 11% compared to February. If that pace were to hold, sales would reach 17.8 million units this year. But that is unlikely to happen. Manzi says in the NADA’s monthly update that sales numbers are lightly to soften as new trade duties likely push new-vehicle prices significantly higher.

“The future of the U.S. auto industry is murky,” Manzi says. “The exact magnitudes of these effects are difficulty to quantify currently. There also likely will be effects on U.S. vehicle exports, as other countries retaliate with tariffs of their own.”