Blue Skies Ahead for Dealerships

Tanabe USA Garage Sale/ Car Meet
The dealership market seems to be in a situation that is quite favorable for dealers, as it is a seller’s market. It is expected to last all through 2014 and well into 2015.

Three factors are outlined as driving forces behind the current dealership seller’s market. The first one, naturally, is the health of the auto retail industry. 15.5 million cars were sold in 2013, which is an increase of 8% since the previous year. The average dealership’s earnings grew by 75%.

Next, car buyers have easier access to capital, thus making increased purchasing possible. Dealerships’ credit is improving, and banks are more willing to grow their dealership loan portfolios.

Finally, we are witnessing a low yield investment environment, which means good acquisition financing rates. As a result, buyers are willing to pay more for dealership’s services.

16 million cars are expected to be sold during 2014.

Read the full article at Dealer Communications.