This has been bothering me for a while and I finally have enough data from my own stores to say it out loud. We are losing somewhere between twenty and thirty dollars per unit on fuel right now. Not on a bad month. Every month. Consistently. And the allowance we are getting from the OEM has not moved in a way that reflects what it actually costs to keep metal fueled on a working lot in 2025.
I run multiple points and the math is the same across all of them. You factor in the fuel to move inventory during prep, the topping off before delivery, the vehicles sitting on lot through a full selling cycle getting driven for demos and appraisals, and that allowance is not coming close to covering real costs anymore. We are subsidizing the OEM's delivery economics out of our own gross and I do not think most manufacturer reps have any idea what the actual number looks like at the store level.
What kills me is that this is such a fixable problem. This is not a complex negotiation. This is not a fundamental disagreement about margin structure or incentive philosophy. This is a reimbursement rate that has not kept pace with basic fuel costs and it is quietly bleeding every dealer carrying significant inventory.
The stores feeling it worst are the ones with large lot footprints and high volume throughput. The more units you move the more you are subsidizing. Volume dealers are getting penalized for doing exactly what the OEM wants them to do.
I have brought this up through the dealer council and gotten a lot of nodding and very little movement. At this point I think it needs to be a louder conversation in forums like this one because the back channel approach is clearly not working.
If you are a dealer principal and you have actually tracked this number at your store I want to hear what you are seeing. And if anyone has had a productive conversation with their OEM about getting this adjusted I really want to know how you got traction because I am not finding the right door.
Tracking almost exactly the…
Tracking almost exactly the same number across our two domestic brand points. We landed at $23 per unit over the last six months after we finally built a proper fuel log. The number that surprised us was not the delivery top-off, which everyone accounts for, but the demo and appraisal fuel. We ran the math on how many miles the average unit accumulates during a normal selling cycle from prep through delivery including every time a salesperson drives it for a demo or a manager moves it for an appraisal and the fuel cost on that alone was running well above what we had been assuming. The allowance was set against a simpler model of what delivery prep actually involves and it has not been revisited in a way that reflects how active lots actually operate now. On the OEM conversation: the only traction I have seen anyone get is at the dealer association level with documented per-unit cost data aggregated across multiple stores. One store bringing this is anecdote. Ten stores with consistent methodology is data the OEM has to respond to.
The volume dealer penalty…
The volume dealer penalty point is the one that should get more attention because it creates a genuinely perverse incentive structure. A store selling 300 units a month is subsidizing six thousand dollars or more before any other variable costs. The stores the OEM most wants to protect and reward are disproportionately funding a reimbursement gap the OEM has not addressed. That is the specific argument worth making in writing to a dealer council because it reframes this from a complaint about fuel costs to a structural misalignment in how volume performance gets rewarded.
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