There’s never a wrong time to purchase a car dealer, but a wrong way to purchase one.
There were dealerships (both domestic and import) in 2009 that made more than half a million dollars in a month, but most pundits said 2009 was not the time to buy a dealer. Have a look at Huntsville Car Dealership.
Remember “If you wait for perfect conditions, you will never get anything done.” Ecclesiastes 11:4. Ecclesiastes 11:4. It is not the “conditions” that count; it is the “analysis.” The truth is that during what the pundits now characterise as the good times.” most car dealerships that closed in 2009 were purchased or built. The times when owners and analysts lamented were the right times” to purchase and construct.
Case in point: Automotive News ran a front-page storey in 2008 about a guy who was building a Toyota dealer on the freeway across from the Coliseum, a $35 million store with five floors and a four-story glass showroom. The experts proclaimed that the dealer “… has a broader vision about the relationship between real estate and car dealers than you would ordinarily find.”
The Oakland Tribune reported on February 24, 2009: “New Toyota dealership in Oakland closes” The customer relations manager of the dealership lamented in that article: “I’m kind of in a state of shock because we thought we had such a bright and opportunistic future here, and with this, it just leaves an empty taste… “
The dealership was meant to fail when one analyses that situation.
For a multitude of factors, not least of which was the rent factor of the shop, the success of the dealership would have been counter to nature’s rules. However, analysing that scenario is left for another paper. For this essay, the object lesson learned is: While a transaction is accepted by the factory, funded by the lenders and applauded by trade publications, these endorsements do not include any assurance that a dealer would succeed. There are many buyers, having said that, who will still believe that those endorsements mean success.