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Top 5 Don’ts When Negotiating the Sale of an Auto Dealership

You own a car dealership, and you want to sell it. Of course, you want to get the best price and terms possible. The question is, how? In my previous post, Top 5 Do’s When Negotiating the Sale of an Auto Dealership, I presented the five best practices to negotiate the sale of a car dealership and get everything (or nearly everything) you want. In this post, I help you steer clear of common pitfalls that can sink the deal or keep you from getting what you really want out of it.

Selling An Auto Dealership

1) Don’t hide from the reality of what your company is.

The strengths of your auto dealership are easy to see, because the dealership is your business and you have put your heart and soul into it. What is more difficult is to see what may not be working as well as it could, or areas where your business is challenged. Challenges may be limitations in terms of personnel, location, business environment, or even personal bias.

Since prospective buyers will take a close look at your business — often with a very critical eye — so you should, too. By knowing in advance where your dealership is challenged, you are much less likely to be surprised during negotiations, and you will be well prepared to respond to any attempts by buyers to low-ball you based on negative perceptions they have of your business.

2) Do not lose track of your ultimate goal or core objectives.

Once a sale process starts, it likely will get a bit wild at times. It is paramount to stay focused on why you are selling and what defines success to you in the process. It may be money, it may be timing, or it could be legacy. Whatever it happens to be, keep it in the forefront of your mind, so it does not become a negotiable item.

3) Do not let a buyer or other participant shame or embarrass you into action.

Remember that unless you have to sell, you always have the ability to walk away, all the way up until you sign the agreement. Just because you started down a path with one person or group does not mean you have to finish. Dynamics change, and as the process unfolds you learn more about the situation. Something may shift or you may discover something you did not realize before. Pay attention to the new information and facts and constantly evaluate. There is no shame in changing your mind as long as you are acting genuine and straightforward with the prospective buyer.

4) Do not tell employees you are thinking of selling.

Wait until you know you are selling. There is a correct time to inform employees, but doing it too early will create more stress than is needed, may negatively affect current operations and may trigger employee flight, which is likely to spook a buyer. You will need a core of company folks to assist in the early negotiation, but the vast majority of employees do not need to know. Instruct all members of your negotiating team to keep plans to sell the dealership confidential, as well.

5) Do not talk to buyers unless you are seriously considering selling the dealership.

This does not mean to hold off until you have decided to sell absolutely, but do not just talk with potential buyers because it feels good or you want to feel special that someone may be interested in buying your dealership. There is value in talking with people who are looking to buy, and that is acceptable, but do not be the person who the industry talks about being always for sale and never selling. In the long run, when you finally decide to sell, if you have a reputation for courting but never committing, nobody will believe you, and anyone who does try to engage will likely do it with a bit of cynicism. Idle talk will make a real deal more difficult to obtain.

You now have a complete set of ten do’s and don’ts for negotiating the sale of an auto dealership. Of course, successful negotiation involves more than simply checking off a list of do’s and don’ts, but following these guidelines will help ensure that you get what you want most out of the deal and help you avoid doing anything to undermine the negotiating process or what you ultimately gain from it.

Disclaimer: The information in this blog post is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from Stephen Dietrich, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this Post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.

About The Author: Stephen Dietrich is an attorney and author who has a passionate interest in the human side of business. His distinctive combination of legal and business knowledge, human insight, and dedication to clients makes him uniquely qualified to help corporate leaders and other C-level executives navigate high-value mergers and acquisitions, restructure transactions, and manage day-to-day operations. Through this blog, Stephen shares his extensive experience and unique personal and professional insights in the hope of stirring thought and dialogue that leads to ever deepening insights and understanding. For more information, please visit

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