The Different Values of a Car Dealership

[johnpico]

Just published another dealership article explaining that the appraised value of a dealership is not the same as the sale value.

If anyone has any interest in the topic, you can find it at:

http://ezinearticles.com/?The-Differ...hip&id=9304791

Hope you find it interesting.

[XDCX]

Thanks for creating the thread and sharing the link.

I'm compressed for time at the moment but when I get a chance later this weekend I'll look forward to reading your article.

[XDCX]

Originally Posted by XDCX

Thanks for creating the thread and sharing the link.

I'm compressed for time at the moment but when I get a chance later this weekend I'll look forward to reading your article.

I finally had a chance to get caught up and just read the article that you linked.

Here's an excerpt that I thought was interesting:

In appraising a dealership, the appraiser cannot base the appraisal upon the possibility the seller may find the "ideal" buyer for the store. A good example would be a recent dealership sale we helped structure. The store was appraised at 8 times earnings just six months before we sold it at 22 times earnings.* Although millions of dollars apart, both values were correct.

The 8 times earnings was a valid "appraised value" for an average sale and the 22 times earnings was a valid purchase price for this particular purchaser.

I follow your logic and can see how amount a dealership is appraised for could be vastly different than what it actually sells for.

As we've mentioned in other threads the valuation of a dealership can be complex and it's certainly in a Dealer's best interest to seek professional guidance.