New vehicle sales rose to 16.4 million last year, the highest level since 2006. Meanwhile, used vehicle sales climbed above 41 million vehicles, an eight year high.
Service departments, which have long been the most profitable part of auto dealerships, were busier than usual in 2014 due to a record 63.9 million vehicles being recalled.
"The recalls definitely created a lot of challenges for our dealerships," said Earl Hesterburg, CEO of Group One Automotive which has 152 dealerships. "But overall, I would say the surge in recalls has been a positive for us because we've had a chance to get customers into the dealerships."
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Dealers are paid by automakers for recall repair work, but in many cases customers who bring in their vehicles wind up having other service work done, or they look to buy a new or used vehicle.
Last year's wave of recalls was driven by massive campaigns involving GM vehicles with faulty ignition switches and several models with defective airbags.
"It's hard to say how much the recalls helped auto sales last year, but I think it did," said James Albertine, auto analyst for Stifel.
Not surprisingly, with profits climbing, investors have put money into the publicly traded dealer stocks. Shares of Autonation, Group One, and Carmax have all posted strong gains over the last year.
How much longer can the good times last for dealers? Albertine thinks it could continue for a while since auto sales are expected to remain strong as will traffic from customers bringing recalled vehicles in for repairs.
"There's a lag effect with these recalls. Many have been repaired, but there are a lot more that still need to be serviced," said Albertine.
Questions? Comments? BehindTheWheel@cnbc.com.