Conditions are ripe for a big buy-sell year. The 2014 pace of dealership consolidation already is almost double that of 2013, one broker says. And the market is likely to stay red-hot.
Large dealership groups are sitting on mounds of cash. They can leverage their operating cost advantage over small dealers, as well as low loan rates, to snap up stores. And investors outside the industry took notice when resurging auto sales led the country out of recession. Now, well-financed outsiders are elbowing in to buy stores. Mix in a positive outlook for U.S. car sales, and you have a rare win-win: Dealers can ask premium prices for their stores, and buyers will pay them because the return on investment still looks good.
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