Survey: Optimism for Dealer Valuations

By Staff Writer November 24, 2020

Automobile dealers are more optimistic about the valuation of their dealerships this year than last year, according to the second annual Kerrigan Dealer Survey. The survey was fielded by Kerrigan Advisors, a sell-side advisory firm to auto dealers in the U.S.

The 2020 survey, which queried 680 dealers, found that 33 percent expect an increase in the value of their dealership – a 27 percent boost compared to 2019 findings, when only 26 percent of dealers expected their dealership value to go up. All told, more than 80 percent of dealers expect the valuation of their dealership to remain the same or increase. Just 14 percent expect a decrease in valuation.

“These bullish dealer valuation expectations are being driven by the rebound in auto sales, record industry earnings, the ongoing strength of the auto retail business model, and expectations for sales and profit growth into 2021,” said Erin Kerrigan, founder and managing director of Kerrigan Advisors.

The survey also provided a glimpse into dealer attitudes about how COVID-19 is impacting their acquisition plans: 64 percent, a clear majority, do not anticipate adjusting their acquisition plans, while 17 percent expect to be more acquisitive; 19 percent plan to be less so. Interestingly, close to a majority (47 percent) of dealers surveyed also believe buy/sell activity will increase in the next 12 months.

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Last modified on Friday, 04 December 2020 15:33