I think I can honestly say I’ve never seen another year quite like 2020 in the car business. I also think 2021 is going to be equally astonishing. Here’s why.
At first glance, the pandemic had a surprising impact on car dealers’ profits. How does a country lockdown for weeks, disrupt supply chains, and diminish household incomes all while making car dealers more profitable?
How a Pandemic = Profit
When you look closely, it all makes perfect sense. Most dealers were carrying a lot of fat at their stores, and the pandemic forced them to stand on the scale and see how far things had gotten out of hand.
So the cost-cutting started in earnest. Dealers called up every vendor they had and re-negotiated their contracts. They cut positions they could live without. They doubled down on customer service and made aggressive moves to get their hands on used cars.
And it all paid off. Not only did their stores become more profitable during the pandemic, most dealers found they could continue with their new staffing numbers and trimmed-down budgets even after things started returning to normal.
Sit tight, or sell?
So right now, in January 2021, most dealers are sitting on stores that are more profitable than they’ve ever been. If they were thinking about selling at the beginning of 2020, right now they’re thinking they’ll just ride this wave a little longer.
But here’s the deal: the best buyers are looking for stores right now. They’re ready to pull the trigger on a great store. They’re playing the long game -- they believe this new-found profit is a new reality, not a blip. They’re not going to wait. They’re going to buy.
So if you have a profitable store and you want to sell it some time in the next year or two, now is the time to talk to us. Trading 6-12 months of profit for potentially millions in a sale is not a good bargain.
We are seeing a surge in buy/sell transactions in 2021. You want to be at the front of the wave in 2021 while the best buyers are still available. Give us a call -- it’s 100% confidential -- and let’s talk about how to position your store for a smooth sale in 2021.