If you’re in the market to purchase a dealership and have been sitting on the sidelines waiting for the market to bottom out, the next 90 to 120 days may yield some of the best buying opportunities that we will see for a long time. The key to making a good acquisition in this market is to be emotionally and financially disciplined.
Over the course of the last several months, there has been a great deal of debate about the nature and amount of any federal assistance for auto makers, with tense discussions focusing on sources of funding, terms of financial aid, and plans for restructuring and future success.
An estimated 1,000 dealerships will close this year, primarily due to the economic crisis gripping our nation. That means roughly one of every 20 dealerships may close its doors. If you are a domestic dealer, your odds are even less favorable.
If you own a dealership selling one of the Detroit 3 brands, you might be thinking the franchise is worthless.
If you believe everything you hear, all you should expect to receive from the sale of your dealership is the value of the real estate and cost of your assets. The value of the “goodwill” or “blue sky” for domestic dealers seemingly is nil.