Denver Metro Mostly High End Used Car Dealership 

Great Location, Great Website, 4.8 Stars Google, High End, High Volume, with Happy Well-Trained Employees 

The 2024 revenues were 16M with earnings 387K because of the temporary impact from higher interest rates, tighter than normal credit, a drop in car sales volume, and a drop in the current value of most vehicles.  2023 was similar with earnings of 386K; BUT, 2022 had earnings of 1M and 2021 had earnings of 1.2M.  The Seller has convinced me that this is a very professional used car lot with some of the best employees in the industry.  It is in a great high traffic location and has great street appeal. 

Keep in mind the timing of this listing.  Rarely are there 3 down years in a row in the used car industry and we just finished 2 ½ down years which means the 12 months after the sales are much more likely to be 1M or more in profit than 2023/2024’s 387K.  

Adding to this is the expected impact from the automotive tariffs which will make new cars more expensive driving up the demand and therefore the price and profits which are not subject to the tariffs since they are already here in the US.

Various Valuation Methods:  1) Taking the last 4 years average earnings which had 2 good and 2 bad years averages 745k per year in earnings which multiplied by the normal successful used car dealership multiple of 4 times would make the sales price 2.98M plus inventory.  2) Taking the last 3 years average earnings which had 2 bad years and 1 good year averages 591K per year X 4 times =’s 2.36M plus inventory.  3) Taking the last 2 bad years average of 387K X 4 =’s 1.55M plus inventory.

Sales Price: The sales price is based on a multiple of only 3 ½ times his lowest earnings of 387K which is a 1.35M sales price plus inventory and the real estate is being offered separately. 

They sell a wide range of used cars including Audi, BMW, Mercedes-Benz, Cadillac, Jaguar, Land Rover, Lexus, Porsche, Lincoln, along with a mix of other makes and models of all kinds.  The business will continue to grow on average over time based on their very high traffic location, quality inventory, experienced salespeople, repeat customers, referrals, and services they provide including accepting trade ins and offering financing choices. 

He listed this business in early 2024 at 2.45M plus inventory but didn’t want to sell the real estate at the time and most buyers of dealerships want to buy the property also since the revenues are mostly location driven.   He is now offering it at 55% off that price and it is now closer to a cyclical turn back up in sales and profits.  In 2025, the used car industry should return to normal even without the added benefit of the tariffs.  The used car market fluctuates up and down and after almost 2 ½ years of a downturn combined with the potential impact of tariffs, this sale could be perfect timing for a buyer.   Tariffs will make high end portion of their inventory which are mostly imported more expensive which will increase the demand for their high end used cars. 

Auto dealers usually sell for +/- 4 times the earnings but we have priced this at 3.5 times the average earnings of just 2024 and 2023 plus his cost of the inventory.  The inventory is extra and is currently estimated to be 2.25M which is cost plus their cost to prepare each car for sale. The actual amount of inventory will fluctuate daily as inventory is sold and new inventory arrives and will be adjusted at the closing properly.  It is updated daily in their website.  

Although the owner has been involved in the business since its inception, he is not "the face of the business” and has reduced his hours to 20 hours a week doing mostly training at this point. 

The buyer will also get 100K in current value of equipment, tools, furniture, computers, surveillance system, phone system, etc.

This company has a 4.8 Star Rating on Google, with 1,256 reviews which is excellent especially for a used car dealership which is very valuable considering trust is a big factor in choosing where to buy a car. It is rated A+ by the BBB. They are also a member of the "Colorado Automotive  Dealers Association". They have a great interactive website with all of their inventory posted on the website.  This company has an excellent reputation in the industry.

 Summary:  The sales price is only 1.35M plus inventory which is currently estimated to be 2.25M.  The real estate is being offered separately at an estimated 2.75M.  He has asked me to screen for only serious buyers who can prove funds, or has secured financing, is private equity, or a buyer who already owns one or more dealerships.  Lenders will require experience, a high net worth, and a 10% to 15% down payment.  Some Buyers will prefer to use “floorplan” financing for the inventory and pay for the business portion without financing. 

The buyer will be required to obtain a Colorado "Dealer License” to operate the business. This is obtained through the Colorado Motor Vehicle Dealer board and can take a month or two.