Most Dealerships Spend Wrong on Used Cars. Here’s What the Data Says.

Where the Money Actually Goes

NADA Data and Demand Local’s H1 2025 report (published January 2026) found that dealerships spent an average of $722 per vehicle sold on advertising. Total industry spend hit $4.8 billion in the first half of 2025, up 8% year on year.

The Mia Vita Solutions 2026 benchmarks added more context: the average franchised dealership spent $586,246 on advertising in 2025, which works out to $739 per new vehicle retailed.

Here’s where it gets interesting. Presidio-NCM’s Q2 2026 report, which tracks roughly 4,000 dealers, puts the blended cost at $406 per vehicle when you combine new and used.

That gap between $739 (new only) and $406 (blended) tells you something. Used car advertising is already more efficient per unit. The inventory is unique, listing sites carry a portion of the reach, and buyers tend to be further down the funnel.

Demand Local’s recommended budget split is 55-60% used, 40-45% new. Most dealerships are running closer to the opposite.

Why Used Gets Less Attention

It’s not a conscious decision. It’s structural.

OEM co-op programmes fund new car advertising. The money is allocated, the compliance requirements are set, and the campaigns get built. That’s how it should work. Co-op exists for a reason and smart dealers use every dollar of it.

Used doesn’t have that same structure. There’s no manufacturer programme pushing you to spend. No co-op dollars earmarked. So the used car budget tends to be whatever’s left after new car campaigns are sorted.

The opportunity isn’t about taking money away from new. It’s about making sure used gets its own proper strategy, its own budget line, and its own measurement, rather than living off scraps.

The Margin Case for Used

Demand Local’s 2026 data:

That net margin is tight for both departments. Every dollar of advertising waste matters. But the higher front-end gross on used means there’s more room to invest in marketing per unit and still come out ahead, provided the spend is structured properly.

At a $2,337 average gross, there’s room to invest. The question is whether your campaigns are set up to use it properly.

Two Different Buyers Need Two Different Approaches

This is where a lot of dealerships trip up. They run the same type of campaign across both departments.

New car buyers are in the market for weeks or months. They’re comparing models, reading reviews, weighing up offers. Brand advertising and OEM promotions play a real role here because the consideration window is long.

Used car buyers move faster. Typically 3-4 weeks from purchase. They already know the model, the colour, and roughly what they want to pay. They’re searching for a specific vehicle, not browsing a brand.

Both types of advertising work. But they work differently.

New car campaigns earn their keep through reach, brand presence, and offer-driven traffic. Used car campaigns need to be more surgical: this specific car, at this specific price, available right now. The ad should be connected to your stock feed so it updates when a car sells. The creative should show the actual vehicle, not a stock image.

Dynamic, inventory-tied advertising isn’t new. But the number of dealerships running it well, with clean photography and a stock feed that syncs daily, is smaller than you’d expect.

What 73% Digital Means for Used

Ritner Digital’s 2026 channel breakdown found that 73% of dealership ad budgets now go to digital, up from 65% in 2023. NADA recommends allocating 6-7% of total gross profit to marketing.

For used cars specifically, digital should probably skew even higher. Used car buyers live online. They’re on Carsales, Facebook Marketplace, AutoTrader, and running Google searches for specific makes and models with a suburb name attached.

Webtonic’s 2026 Google Ads data shows used vehicle dealerships averaging $4.12 CPC, 5.41% CTR, 4.67% conversion rate, and $42.35 cost per lead. That CPC is higher than the automotive average ($3.13), but the intent behind those clicks is strong. These are people looking for a specific car.

Two Things Worth Getting Right

1. Give used its own campaign structure.
New car campaigns are built around brand and offers. Used car campaigns should be built around inventory. Different formats, different targeting, different measurement. If you’re running the same playbook across both departments, one of them is underperforming.

2. Track used separately.
The Presidio-NCM $406 blended figure is useful as a benchmark, but it hides the difference between departments. If you’re not splitting cost per sale between new and used, you can’t see where your money is actually working. Used car advertising tends to be more efficient per unit, but you need the data to prove it and to keep improving it.

What This Looks Like in Practice

A dealership doing 50 units a month (30 used, 20 new) with a total marketing budget of $12,500-$25,000, Demand Local’s 2026 recommendation is:

That’s not about cutting new car spend. It’s about making sure used car spend reflects the margin opportunity.

Give used its own strategy. Tie the creative to your inventory. Measure it independently. The margin opportunity is real. Most dealerships just haven’t built the campaigns to go after it yet.

The Tactical Side

This is part one of a two-part series on used car advertising. In part two, The Used Car Budget Nobody Talks About, we get into the tactical side: how to structure campaigns, which platforms earn their place, and what “inventory-tied” advertising actually looks like in practice.

Dean Meroiti is CEO of AXL MEDIA, an automotive performance marketing agency in Melbourne. Want your used car spend measured properly? dean@axlmedia.com.au