More dealers than a year ago are bullish on the valuations of their dealerships over the next 12 months, despite the coronavirus pandemic and hits to the economy, according to a survey by Kerrigan Advisors.
The second annual survey by the dealership advisory firm found that 33 percent of dealers expect the value of their stores to rise in the next year, up from 26 percent of dealers surveyed in 2019. Another 53 percent expect values to remain the same, down from 60 percent in 2019. And 14 percent expect a decrease in dealership values in the next year, the same percentage as in 2019.
"The rebound in auto sales coupled with reduced dealership expenses and higher vehicle margins will result in record industry earnings in 2020," Erin Kerrigan, managing director of the Irvine, Calif., firm, wrote in a report summarizing survey results.
Through August, net profit for the average new-vehicle dealership was $1.1 million, up 13 percent compared with the same period in 2019, according to the National Automobile Dealers Association.