This question comes up in almost every dealership conversation we have. Not because dealers don't know what they're spending — but because they're not sure if it's the right amount.
The short answer: $500–$700 per unit sold is the industry benchmark for total advertising. But the more useful answer involves understanding what that means in monthly dollars, how to split it across digital channels, and why the benchmark alone can mislead you.
Here's the framework.
The Industry Benchmark (And Its Limits)
According to NADA's 2025 Dealer Insights report, the average new-car dealership in North America spends approximately $628 per new vehicle sold on all advertising — digital and traditional combined. That number has been climbing steadily as traditional media (radio, print, TV) costs hold flat while digital costs rise with competition.
For a BC dealership selling 60 new vehicles a month, that benchmark puts total advertising spend around $37,680/month. For a dealership doing 20 units, it's closer to $12,560.
The problem with using this benchmark as gospel: it averages across every market from rural Saskatchewan to Metro Vancouver. BC dealerships, especially in the Lower Mainland, operate in significantly more competitive advertising markets. You'll likely spend more per unit than the national average — and that's not necessarily a problem if your CPL and close rate justify it.
A more useful local lens: what's a good cost per lead for your dealership? Start there, then work backward to budget.
Digital vs. Traditional: Where the Split Is Going
The industry-wide shift toward digital has been dramatic and it's not slowing down:
| Year | Digital Share of Dealer Ad Spend |
|---|---|
| 2019 | 48% |
| 2021 | 58% |
| 2023 | 65% |
| 2025 | 70–72% |
Source: Borrell Associates Automotive Advertising Annual, 2025
For most BC dealerships, digital now makes up the bulk of the budget. Traditional media (radio, newspaper, community sponsorships) still has a role for brand recognition and local presence — but the trackable ROI is almost entirely on the digital side.
This matters for budget planning because digital spend is where you get measurable cost per lead data. If you can't tell how much each lead costs, you can't optimize your spend.
How to Set Your Monthly Budget
Forget the benchmark for a moment. Here's a practical framework:
Step 1: Define your unit target. How many units do you need to move per month? Let's say 40.
Step 2: Know your close rate. If your sales team closes 20% of leads, you need 200 leads to sell 40 cars.
Step 3: Know your target CPL. For BC dealerships, a solid blended CPL across Google and Facebook is $40–$65 per lead. Let's use $50.
Step 4: Calculate your required ad spend. 200 leads × $50 CPL = $10,000/month in media spend.
Add agency/management fees (typically 15–25% of media spend for a full-service agency) and your total marketing cost is $11,500–$12,500/month to hit your unit target.
Use VELO's CPL Calculator to run this math with your own numbers — it takes about two minutes and gives you a specific monthly budget target.
How to Allocate Your Digital Budget
Once you know the total, the harder question is where to put it. Here's a starting framework for BC dealerships, adjusted by budget tier:
$3,000–$6,000/month (smaller volume dealer):
| Channel | % | Monthly Spend |
|---|---|---|
| Google Search (exact/phrase match) | 55% | $1,650–$3,300 |
| Facebook/Instagram (retargeting + prospecting) | 35% | $1,050–$2,100 |
| Testing budget | 10% | $300–$600 |
At this budget level, Google should dominate. You don't have enough volume to feed Facebook's algorithm efficiently on the prospecting side, so lean into high-intent search while using Facebook primarily for retargeting website visitors.
$6,000–$15,000/month (mid-size dealer):
| Channel | % | Monthly Spend |
|---|---|---|
| Google Search + Performance Max | 45% | $2,700–$6,750 |
| Facebook/Instagram | 35% | $2,100–$5,250 |
| YouTube pre-roll | 10% | $600–$1,500 |
| Testing budget | 10% | $600–$1,500 |
YouTube starts making sense at this level, especially for trucks and SUVs where visual impact drives consideration. A 30-second pre-roll showing your F-150 inventory on a BC mountain road reaches in-market buyers on YouTube search and across Google's display network.
$15,000+/month (high-volume dealer): At this level, channel mix becomes less important than creative quality and conversion infrastructure. The marginal dollar goes to better creative and better landing pages, not more channels.
See our breakdown of Google Ads vs. Facebook Ads for BC Dealerships for more detail on how each platform performs and where to weight your budget.
The Hidden Costs Dealers Undercount
Your media spend is just one part of the equation. Common items BC dealers forget when calculating true advertising costs:
Agency management fees: 15–25% of media spend (or flat monthly retainer). Make sure you know which structure you're on and whether it aligns with the agency's incentive to control costs.
Creative production: Photography, video production, ad copy. If your agency handles this in-house, it's usually bundled. If you're doing it separately, budget $500–$2,000/month for fresh creative assets.
Landing page hosting and tools: CRMs, lead routing software, call tracking. Not always itemized as "advertising" but directly tied to your ad ROI.
Wasted spend from poor attribution: If you're not tracking which leads came from which campaigns, you're almost certainly over-funding your worst-performing channels. Attribution setup is a one-time cost that pays for itself quickly.
When to Increase Budget (And When Not To)
Increase your digital ad budget when:
- Your current CPL is at or below your target and close rates are healthy — more budget just means more profitable leads
- You're launching a specific campaign (year-end clearance, new model arrival) with strong creative ready to go
- A competitor just pulled back spend — their budget gaps are your opportunity
Don't increase budget when:
- Your CPL is already above target — more spend doesn't fix a broken funnel
- You don't have the sales capacity to handle more leads
- Creative is stale — pouring money into ad fatigue just accelerates the burn
The One Number That Matters
All of this comes back to cost per lead. If you know your CPL, your close rate, and your gross margin per unit — you can calculate exactly what your advertising is worth and whether it's working.
If you don't know those numbers, start there before debating budget.