Auto Dealer Valuation Insights

November 30, 2023 Special Topics

Return to Status Quo or a New Normal?

Auto Leasing Trend Update

In the evolving landscape of vehicle transactions, consumers have veered away from leasing due to factors like inventory shortages, higher interest rates, and less attractive leasing incentives. Despite this shift, leasing remains a cheaper option than buying, with dealers and manufacturers closely monitoring the market’s changing dynamics. As leasing shows signs of recovery in 2023, its future in the auto industry hinges on factors like market trends, consumer behavior, and effective dealership strategies.

November 22, 2023 Electric Vehicles Special Topics Valuation Issues

Key Takeaways for Auto Dealers from the 2023 AICPA Dealership Conference

Last month, we attended the 2023 AICPA Dealership conference and in this post present key takeaways on two sessions that are of interest to our blog readers: “Driving Success in Auto Retail” and “The Electrification of Auto Retail.”

November 9, 2023 SAAR

October 2023 SAAR

The October 2023 SAAR data indicates a nuanced picture of the auto industry, showing a slight decline from the previous month but a notable increase compared to last year, with sales reaching the highest October level since 2020. While the seven-month streak of double-digit year-over-year SAAR improvements has ended, the overall trend remains positive with a steady recovery in the industry inventory-to-sales ratio and an increasing Days’ Supply. This detailed analysis, including insights on inventory levels, transaction prices, and future outlooks, provides a comprehensive understanding of the current state and projections for the auto industry.

November 3, 2023 Mergers, Acquisitions, & Divestitures Special Topics Valuation Issues

Newly Released: Auto Dealer Video Series

Mercer Capital’s Scott Womack had the pleasure of being invited to record a series of videos created by the Rawls Group, where he talked with partner and succession advisor Dan Iosue. Get to know what both Dan and Scott do best as they talk about everything from the best timing for valuations to how to successfully negotiate business disputes in the auto industry. 

October 27, 2023 Valuation Issues

Dealership Working Capital

A Cautionary Tale Against Rigid Comparisons

Understanding the intricacies of business valuation, particularly for auto dealerships, involves a comprehensive examination of balance sheets, income statements, and normalization adjustments. We explore the significance of tangible and non-operating assets, the nuances of working capital, and the critical nature of management insights in assessing a dealership’s true value. A case study highlights the multifaceted approach required, underscoring the importance of expert analysis in navigating the complex terrain of financial assessments and valuations.

October 20, 2023 Public Auto Dealers Special Topics Valuation Issues

Just Released: Mid-Year 2023 Auto Dealer Industry Newsletter

We are pleased to release our latest edition of Value Focus: Auto Dealer Industry Newsletter.

October 12, 2023 SAAR

September 2023 SAAR

The automotive industry has witnessed its fourteenth consecutive month of annual improvements in the Seasonally Adjusted Annual Rate (SAAR), with September 2023 recording a SAAR of 15.7 million units—a 14.9% increase compared to the previous year. However, we anticipate a potential end to the double-digit year-over-year improvements streak in the coming month. With challenges like the United Auto Workers strike and changing supply chain conditions, it remains critical to monitor consumer activity and sales trends, especially given the decline in transaction prices and surge in incentives.

October 6, 2023 Electric Vehicles Special Topics Supply Chain

United Auto Workers Strike

What It Means for Auto Dealers

The United Auto Workers (UAW) strike has been ongoing for almost a month now. In this post, we talk about how we got here, updates on the strike, and the strike’s anticipated impact on auto dealers.

September 29, 2023 Blue Sky Special Topics

The Winding Road to Blue Sky Value

Important Considerations in Auto Dealer Valuations and Pitfalls to Avoid

In the upcoming month, Scott Womack and David Harkins will present at three different forums, shedding light on the pivotal aspects and considerations of auto dealer valuations, including special considerations in litigation/buy-sell matters. They will delve into why traditional market approaches are generally not applicable for the valuation of auto dealerships, especially single rooftop operations, and explore the limitations of existing database evaluations. Beyond this, they will also explore the changing dynamics of value drivers like real estate and employee management, highlighting the shifting landscape as the industry moves towards digital and online platforms, and offer insights and suggestions for navigating buy/sell litigation and ensuring fair and consistent transactions.

September 13, 2023 Valuation Issues

Do You Know How Much Your Dealership Is Worth?

Whitepaper: Understand the Value of Your Auto Dealership

If you’ve never had your auto dealership valued, chances are that one day you will. The circumstances giving rise to this valuation might be voluntary (such as a planned buyout of a retiring partner) or involuntary (such as a death, divorce, or partner dispute). When events like these occur, the topic of your auto dealership’s valuation can quickly shift from an afterthought to something of great consequence.