New Car Dealers — Business Survival Rate
An estimated 65% of new car dealers businesses survive their first 5 years, based on U.S. Census Bureau Business Dynamics Statistics. The annual business closure rate is 8.4%.
Is New Car Dealers a Good Business to Start?
With a 65% five-year survival rate, new car dealers has an above-average survival rate compared to the national average of roughly 50%. This makes it a relatively safe industry to enter — businesses here tend to find stable demand and sustainable economics.
The annual exit rate of 8.4% is lower than many sectors, suggesting that once established, these businesses have staying power. That said, lower failure rates often correlate with higher barriers to entry or established competition.
Entry vs. Exit Rates
Annual rate of new businesses opening versus existing businesses closing.
Net negative: more businesses closing than opening (-0.5 pp spread).
Job Creation & Destruction
The industry is losing jobs faster than creating them — which may indicate automation, consolidation, or declining demand. Total employment: 1,289,244 workers across 36,288 firms.
Want to know how much new car dealers businesses actually make?
See full revenue benchmarks for New Car Dealers →Frequently Asked Questions
- What percentage of new car dealers businesses fail?
- Approximately 35% of new car dealers businesses fail within their first 5 years. The annual closure rate is 8.4%, with 3,041 firms closing permanently in 2023.
- Is the new car dealers industry growing or shrinking?
- The new car dealers industry is currently stable with a net job creation rate of -0.4% per year. New businesses are entering at 7.9% while 8.4% close annually.
Source: U.S. Census Bureau, Business Dynamics Statistics (2023). Survival rate estimated from annual exit rates.