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Tips For Buying An Automotive Dealership
If you’re in the market to buy an automotive dealership, here are some basic tips to guide you through the process. First off, know that this process will be both exciting and overwhelming. It is important to have the guidance of a seasoned resource that has experience in handling automotive dealership transactions. They will help with many details and facilitate the transfer of ownership, removing much of the burden from you. But, to get you started, here a few things to keep in mind as you begin the journey.
1. Manufacturer Do your homework on the manufacturer. Product plans, market share trends, quality perception, etc. all play into how valuable the dealership is and will be. Is it a growing brand or a declining one? Industry trades are a great resource to gather much of this information.
2. Location As with any business, location can mean the difference between success or failure. Does the location provide enough traffic to be successful? Is the real estate large enough for the inventory that needs to be held to be successful? Are there any zoning issues that will impact business? Future area building plans? The list is long, but make certain you are comfortable with the property’s location and that it has the accommodations necessary for your business plan.
3. Due Diligence With any sort of transaction of this magnitude, it is imperative to perform due diligence to know exactly what you are getting. With a seasoned professional by your side, the list of things to look at should begin with: Financials, Market Performance, Corporate Formation, Employees, Vendors, Contracts, Insurance, Past/Current Litigation. This list is by no means all-inclusive, but rather the major areas to start the journey.
It is also important to look at social media to see what customers are saying about the dealership. Facebook, Twitter, Yelp, DealerRater, and Google are all great resources to gain an understanding of how the market views the dealership. Of course under new ownership, any past issues can be addressed and corrected accordingly. However it can be challenging (to say the least) to change public perception. If you’d like to learn more call me today, Kirk Rimsnider (480) 306-7074. I can be in your market within 48 hours.
Don’t get caught with your hand in the cookie jar…
There is a fair sized automotive group that shall remain nameless that may have intentionally or unintentionally run afoul of a particular State’s consumer protection laws. The State’s Attorney General alleges fraud and unfair business practices in the Dealer’s sale of credit repair and identity theft protection services that were frequently “worthless to consumers.” The State’s A.G. claims at least 1,475 consumers were defrauded, which if action is taken, means the Dealer will face at least that many counts. As margins get squeezed ever tighter, Dealers explore new opportunities to recapture lost gross. After sale products are the most frequently method employed because, in many cases, the product cost is low and the selling price is high. Many products have substantial consumer benefits, and two tried and true examples are GAP policies and extended service contracts. Will every consumer derive a benefit from these products? Absolutely not, but they categorically reduce risk for events that can and do occur with a good level of frequency. The benefits for theses product are tangible and their costs are generally not unreasonable. So, is it time to run for the hills? The long and short answer is no. Good dealer/operators need to maximize profit opportunities, and there are many after sale product that fit the bill. However, there are some that don’t and these are the ones that can expose you to unwanted regulatory and media attention. Now is the time to thoroughly review every aspect of your sales and F&I process before you end-up on the front page of your local newspaper.
- Do I sell products that have a real benefit for my customer?
- Is the ‘front-end’ fully aware that packing the payment (leg) for the ‘back-end’ is strictly against policy?
- Are the features and benefits for all after sale products being explained fully to my customers?
- Are all involved costs fully disclosed?
Making money is the name of the game, but there is a right and a wrong way to do it. Doing it the right way protects you, you reputation, and just plain makes good sense.
Prism Closes Another Deal

Congratulations to Jerry and Diane Pajouh on the acquisition of Courtesy Motors, Chico, CA. The transaction with Stephen Wade and John Anderson as Sellers, includes a phenomenal lineup with the BMW, Mercedes Benz, Buick BMC Cadillac, Volvo, and Subaru franchises.

Prism Business Brokers were the exclusive facilitator of the acquisition.

Whether you are buying or selling, Prism Business Brokers has the relationships and work ethic needed to diligently bring our clients together with the right deal. We’re all in the business for the same reason: value-driven results. Now, Prism Business Brokers seeks to instill a higher sense of integrity and transparency across all deals to ensure that everyone involved walks away completely satisfied. The industry is complex enough; let Prism Business Brokers streamline your upcoming auto dealership merger or acquisition to maximize your deal’s potential without any of the over-the-top aggressiveness.

Bios

Kirk Rimsnider

Kirk has over 30 years of dealer experience across every aspect of their business including OEM, ownership/management and brokering throughout the United States and Japan. He is motivated by bringing the right sellers and buyers together for better business relationships tailored with trust and integrity.

His experience includes: Director – West Region of the Tim Lamb Group; owner/operator of Buick Pontiac GMC Ventura, CA; Regional Divisional Marketing Manager for Buick, Pontiac, and GMC Truck; Director of Cadillac Division-Japan; Director of Sales and Marketing at Isuzu Motors-Japan; Zone Manager Oldsmobile Division-Los Angeles and District Manager in Minneapolis, Milwaukee, Chicago, Indianapolis and Philadelphia.
Erin Tenner

Legal

erin@cardealerattorney.com
David Hawkins

Valuations

d.hawkins@thecarcpa.com

Testimonials

I started working with Kirk several years ago to purchase my first dealership. His vast experience with dealerships and the manufactures proved to be priceless when a Chevrolet Open point presented itself. His advise, hard work and persistence was a huge factor in being selected for this opportunity. Kirk continues to follow up and check in with me to offer assistance. I will no doubt use Kirk for any future expansion plans and I will recommend him to anyone that asks.

Leo Portaluppi
Chevrolet of Columbus
Columbus, IN

I have known Kirk since his days at General Motors. His sincerity and honesty was prevalent then and his character has not changed over the past 10 years. We purchased a platform of dealerships with him as our broker, and the process was extremely smooth and seamless. He was very professional and kept our best interests at the forefront of the deal. Kirk continues to work with my organization on a daily basis as he has continued to show us exciting opportunities. We all have a high regard for his talents and experience, and most important, his integrity. We feel like anything he has presented to us was factually correct with is very comforting. Kirk is such a pleasant person to work with.

Stephen W. Wade
President
Stephen Wade Auto Centers

In 2009, I started the process of purchasing my first dealership after having been a dealer group partner for several years. After participating in several acquisitions with my previous partners the experience working with Kirk on my purchase was nothing short of amazing! Kirk’s ability to manage the complexity of a deal combined with his OEM experience and knowledge made the process flow smoothly and the deal closed with no problems. I would absolutely work another buy-sell with Kirk because I know his diligence on the details will produce results.

Matt Saxe
Matt Saxe Chevrolet Buick Inc.
Belle Plaine, MN

Kirk Rimsnider has sold two dealerships for me. Kirk is professional, articulate, always accessible, and most of all has integrity like no one else. Simply said, Kirk is a great guy and a pleasure to work with. I highly recommend Kirk Rimsnider for your buy-sell needs, and I am qualified to make that statement as I have known Kirk for more than 15 years.

Leo Bunnin
California Dealer

Bios

Kirk Rimsnider

Erin Tenner

David Hawkins

Testimonials