Car dealerships for sale

An authorised dealer sells new cars under an agreement with the importer or manufacturer. The agreement usually sets the territory and requirements for the showroom, workshop and training, and it normally cannot be transferred without approval. Review the term and notice, and make the purchase conditional on the importer approving you as the new owner. A pure used car dealer has more freedom, but lives on the ability to buy the right cars at the right price.

The cars on the forecourt are often a large share of the capital and are valued separately at the takeover. Agree in advance how they will be counted and what happens to cars that have been in stock for a long time. Many dealers fund their stock through a stocking credit line and earn commission on car loans and leasing through financing partners. Check whether those agreements can continue, and how much of the profit comes from commission, workshop and parts rather than car sales themselves.

If the dealer has its own workshop, that is often the most stable part of the earnings, because customers return for servicing and repairs. Check whether the workshop is authorised for the brand and how warranty work is settled with the importer. Ask about complaints on cars already sold, as they come with the company in a share purchase.

Sitavo’s indicative range for the category is 2–3.5 times annual profit (SDE), cross-checked against 0.2–0.6 times revenue. A strong brand agreement, a workshop with regular customers and a good location push the price up. A large stock of older cars and an agreement close to expiry pull it down.

• Dealer agreement, term and the importer’s approval.
• Stock list with purchase price and days in stock.
• Stocking credit and agreements with financing partners.
• Complaints and obligations on cars already sold.
• Lease, showroom and workshop.

Read the general advice on buying automotive businesses, and compare with car trading under trading businesses.