Auto Dealerships

A Business Valuation Exercise as Much as a Real Estate One

Dealership transactions weigh the franchise agreement value, inventory financing arrangements, and service department profitability separately from the real estate — fundamentally a business valuation exercise more than a pure property sale.

New car franchise purchases require manufacturer approval of any ownership change, a separate process from the real estate transaction that can take significant time and needs to be factored into your overall timeline.

How Auto Dealerships Are Valued

Key drivers of value in this category

Franchise Agreement For new-car stores, the franchise agreement itself carries significant value, subject to manufacturer approval of any transfer.

Service Department Service and parts profitability often represents a stable, recurring revenue stream separate from vehicle sales.

Inventory Financing Floor plan financing arrangements and inventory value factor into the overall transaction structure.

Purpose-Built Real Estate Dealership real estate is often purpose-built and may need retrofitting if the franchise changes or terminates.

Auto Dealerships Due Diligence

What to verify before you commit

Manufacturer Approval ProcessUnderstanding the timeline and requirements for manufacturer sign-off on any change of dealer principal or ownership.

VSA Licensing StatusConfirming BC Vehicle Sales Authority licensing is current, with bonding requirements verified for used dealers.

Service Department FinancialsReviewing service and parts revenue and profitability separately from vehicle sales performance.

Floor Plan Financing ReviewUnderstanding existing inventory financing arrangements and how they transfer or need restructuring.

Real Estate Condition & UseAssessing whether the purpose-built facility suits a continuing franchise or would need retrofitting.

Franchise Agreement TermsReviewing territory rights, performance requirements, and remaining term on the franchise agreement.

Auto Dealerships Questions, Answered

The manufacturer must approve any change of dealer principal or ownership structure — a separate process from the real estate transaction that can take significant time.

BC's Vehicle Sales Authority licenses all motor dealers in the province. Both new and used dealerships need an active VSA licence, with additional bonding for used dealers.

Dealership valuations weigh the franchise agreement value, inventory financing, and service department profitability separately from the real estate.

Yes — some dealership real estate trades independently of the business, particularly when a dealer is relocating or a franchise is being terminated.

It varies by manufacturer and can take several weeks to a few months — factor this into your closing timeline rather than assuming a standard commercial transaction pace.

Inventory is typically addressed separately from the real estate and franchise, often through existing floor plan financing arrangements that need to be assumed or restructured.

Buying or Selling Auto Dealerships?

Every transaction in this category has its own rhythm and considerations — let's have a direct conversation about yours.

(604) 727-9542

Car Washes →Retail Spaces →All Commercial →