A new administration in the White House always brings change. This time those changes are coming faster than usual.

There is some uncertainty among buy sell professionals regarding how the new administration’s approach will impact the retail automotive sector. But where the buy sell environment is concerned, they are generally optimistic it will be a good year.

The administration “has announced a number of things, or certainly has discussed a number of things, that come from a pro-business, low-regulation perspective,” Willie Beck, co-managing partner at Bel Air Partners tells Getting to Go!

“It’s whether those things actually get implemented or not (that is in question),” he says. “So, we’re in a period of uncertainty.”

Scali Rasmussen founding shareholder Bert Rasmussen sees tax cuts and a lower corporate tax rate as potential policies that will positively impact the buy sell market. They would free up cash for investments.

Like Beck, Rasmussen sees less regulation, including a rollback of Dodd-Frank Act provisions and a shift in the Consumer Financial Protection Bureau enforcement, as positives, reducing dealers’ compliance burden.

On the negative side, Rasmussen notes, dealers worry that a pro-Wall Street White House may not support individual state laws that prevent manufacturers such as Tesla from opening non-franchised stores.

Then there’s the real 800-pound gorilla in the room: tariffs. The administration’s on-again off-again approach to tariffs creates uncertainty in an industry that likes to plan ahead.

At the time this was written, the administration had announced that tariffs on cars and parts would be levied starting in April. That may be altered by the time this is published.

If they stick, tariffs could add as more than $10,000 to the price of some new cars.

Ready to execute

While he admits there is some uncertainty around which policies will actually get executed, Dave Cantin, president and CEO of the Dave Cantin Group, says that the biggest uncertainty -- who will be in the White House -- has been resolved. And the automotive industry is bound to benefit, he says.

President Trump’s “goal is to create a stronger U.S. economy,” Cantin tells Getting to Go! “We are never going to accomplish that goal if the automotive industry isn’t thriving.”

Dealers who have been sitting on the sidelines are ready to act, whether that be selling a dealership or buying one, he says.

”I think we are going to see a lot of different organizations that we would never have thought of or imagined would possibly exit are going to exit,” Cantin says.

Those exits may occur because dealership groups want to reinvest in brands and locations that fit their growth strategy better, Cantin says.

“You have a lot of dealers getting a lot smarter,” he says. “They are looking at their portfolio with a more analytical eye.”

The usual reasons for selling will continue in 2025, as well.

Aging dealers without clear successors are eyeing 2025 as a good time to sell, Andy Church, vice president of the U.S. east coast operations for Canada-based Dealership Mergers and Acquisitions, tells Getting to Go!

“A lot of dealers have been sitting on the sidelines,” he says. “I have been talking to dealers who don’t want to be 71 years old and still doing this.”

But not all those dealers are ready to leave the business entirely. DSMA is seeing a growing appetite for hybrid financing by groups such as Open Road Capital, which allow the original owner to retain a stake in the business, Church says.

Bel Air’s Beck warns that reaching agreement on a price may get more difficult in 2025.

“Clearly pricing is not in the same position as it was right after COVID because dealer profitability is coming down,” he says. “As my partner Todd Berko always likes to say, there’s always a market. The issue is the spread between what the buyer wants to pay and what the seller is willing to accept.”

Tariff roulette

Perspective buyers used to be interested in a dealership’s performance over the last five years to determine what they were willing to pay. That time frame has shortened now, says DSMA’s Church.

“Multiples have come down because profitability has come down. Now, everybody’s saying, ‘what did you do in 2024?’ That’s all they care about,” he says.

But using 2024 as a predictor for future performance has become more difficult because of the threatened and enacted tariffs.

How they may impact the price of a vehicle and thus consumer demand and dealership performance is an unknown.

“A key open issue for everybody right now is the tariffs,” Beck says. “What is going to happen with many of the manufacturers who are producing overseas but shipping the cars here? That is yet to be seen but could have significant negative impact on certain brands and certain vehicles.”

For import brands that don’t manufacture here in the U.S., “you have to be concerned about the lagging effect” of tariffs, Church says.

How long the tariffs may last is difficult to know. The auto industry has political clout, Church points out.

“Where is it malleable is that NADA is one of the largest trade organizations in the world. Those entrepreneurs in the smaller markets believed and voted for Trump. They have a voice at that table,” he says.

Luxury brands look better than ever

Many luxury brands are manufactured overseas. Those manufacturers are likely sweating the tariffs. But the new administration could be good for luxury brand franchises in other ways.

“Mercedes and Porsche are going to benefit,” Church says. “Let’s face it, when the culture of America is, ‘it’s okay to have wealth and be wealthy,’ then those franchises succeed even more.”

One publicly listed automotive group that has a large stable of luxury franchises is encouraged by the buy sell outlook for 2025.

“We're seeing a lot of opportunities on the luxury side across the country,” Sonic Automotive Group president Jeff Dyke said on the fourth quarter 2024 earnings call.

“Multiples have actually gotten better from our perspective, not worse. We're seeing more deals come across. I've been with Sonic for 20 years,” he says. “We're seeing more deals come across our desk now than we ever have. And we're in a great position. We're going to buy in just about every single manufacturer that we have, certainly across all the luxury and import lines.”

This article was written for Getting to Go, a buy/sell newsletter from Scali Rasmussen.