Author: Jennifer Rafael, Vice President & Partner

What Today’s Buy-Sell Market Means for Automotive Dealers Considering an Exit

As a Dealer Principal, the questions of if and when to sell require significant consideration. After all, when it comes to a legacy into which you’ve likely poured a sizable amount of sweat equity, it’s important to ensure that any potential transition reflects the value of the asset you’ve built.
As with all buy-sell markets, the dealership market can fluctuate. And as a result, trying to pinpoint as a dealer the exact right time to enter the market can feel like trying to decipher a kind of secret code.

If selling your dealership is an option you’re considering, the right time to do so is always the timing that works best for you. External market factors will always be in play. The key to making a successful exit as a dealer is to navigate those factors to your greatest possible advantage.
That said, a sizable contingent of dealership principals are finding themselves asking as of late, could now be the right time to sell?
“The question is a fair one, to be sure,” said Jennifer Rafael, Vice President and Partner at DSMA. “Any dealer feeling at all unsure about the market is certainly not alone. The economy at-large has become a new reality for business owners across the spectrum in today’s market.”
What’s important to know now if you’re a dealer eyeing an exit is that selling your business in a successful and profitable manner — even in today’s sometimes unpredictable market — is entirely possible when you have a strong team backing you.

The question of “When is the right time to sell at top-dollar?” is certainly relevant, but another question that is perhaps even more important is, “Who is the right partner to help me sell at top-dollar?”
A strong buy-sell partner that is well-versed in the intricacies of auto dealership mergers and acquisitions can help situate you in the best possible position in any given market. And if you’re looking for the right partner, DSMA would like to invite you to discuss how our team can be the right fit for you amongst today’s evolving landscape.

Post-COVID, there are many insecurities about the market. The industry initially encountered inventory and production shortages. However, as the pandemic subsided, the balance shifted markedly. Dealerships found themselves inundated with new inventory while facing difficulties in acquiring used inventory at profitable margins. Furthermore, rising interest rates have compounded the complexity of the situation.
All this has meant profits are down for brands across the landscape of OEM. But that doesn’t necessarily equal a true negative impact for the industry. DSMA’s acquisition strategy sets us apart from other buy-sell partners. By exploring not only historical values, but future values as well, we ensure that our service is relevant to the market. We take out all the “noise” to implement the right strategy for our customers.
Through this strategic process, we’ve examined issues experienced during the last three years and also projected modeling of what the next three will look like, based on market conditions. This approach allows us to right-size our values and make them relevant to today’s market. DSMA helps our customers make decisions based on comprehensive analysis and modeling rather than instinct and speculation. In other words, we give our customers a data-driven snapshot of the future – one that right now suggests it’s a good time to sell.

Here are just a few reasons why dealers choose DSMA as their trusted advisor when considering making an exit from their business:

• Strong network of interested buyers: Today’s dealership buy-sell market contains a healthy volume of dealers looking to acquire, which is one of the reasons why now may be an advantageous time for exiting dealers. Importantly, though, buyers must be chosen wisely.
Different kinds of dealerships need different kinds of buyers. A qualified buyer is one who is likely to be approved by your dealership’s OEM, is familiar with your local market and has experience running a dealership of similar size and scale. It’s for this reason that it’s so important to select a buy-sell partner with a large network of potential acquirers.
A partner with a robust array of active candidates has a large pool to draw from when matching you as a seller with a buyer who will provide the right fit for your specific circumstances. As one of North America’s leading dealership mergers and acquisitions partners, DSMA has strong relationships with a wide array of diverse potential buyers.

• Industry-leading business valuations: As a dealer preparing for an exit, the importance of an accurate valuation cannot be overstated. A dealership’s valuation is one of the most influential factors in attracting the right buyer candidates for your business.
A business assessed too high above market rate will struggle to attract buyers, leading to a longer time on market, leading in turn to increased hesitancy among potential buyers. Meanwhile, a business assessed too low will reduce the returns seen by the exiting dealer.
DSMA is an industry leader in producing truly accurate business valuations that achieve equilibrium between buy-side and sell-side. As a dealer, this means attracting the right candidates and facilitating a swift, smooth transfer.

• Full-service capabilities: Mergers and acquisitions require a diverse range of specialties. From legal experts to financial advisors, marketing consultants and more, many experts are required to ensure an efficient and successful transaction. DSMA’s 360-degree team includes legal experts, financial advisors, transaction managers, a marketing team and more to provide dealers with a single trusted partner invested in their success.
It starts with our team of “matchmakers,” who do the heavy lifting for you to identify targeted, relevant and qualified buyers to successfully take over your business. From there, DSMA handles every step of the process — from due diligence to OEM approval and more.
DSMA knows that by working with a single partner, dealers drastically reduce privacy risks. That is why the firm combines multiple specialties in-house to ensure discretion and confidentiality.

“As a dealer eyeing an exit, timing is a consideration, but timing isn’t everything,” said Rafael. “Any set of market conditions come with their own pros and cons. When it comes to making the most successful and profitable exit possible, the most influential factor will always be the partner you choose to be your advocate in navigating those market conditions.”

With nearly 500 transactions completed, DSMA is the automotive industry’s leading mergers and acquisitions firm. From the initial valuation to closing the deal, DSMA provides complete, end-to-end service, simplifying the process and ensuring dealers can make a seamless and profitable exit.
With the right partner by your side, you’ll be in the best possible position to make the most profitable exit possible under the market conditions surrounding you. If you’re a dealer considering whether now could be the right time for you to make a move,
you can contact local trusted mergers and acquisition advisors in your market by visiting

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