Industries

The word "Dealership" most often is associated with automobile dealerships.  However, other types of dealerships include those that sell heavy trucks, farming machinery, boats, and recreational vehicles.  Even with the vast market for their products, dealerships are in competition with each other and must understand the different profit centers and how each one interrelates with the others in order to form a profitable dealership.  Our professionals can work with you to help in understanding these relationships.  This understanding allows us to help you improve profit margins and cash flows while reducing expenses.  We are available to help you develop a business plan that maximizes overall profits.

Dealerships often have a relationship with their suppliers different than most commercial businesses.  They must often enter into franchise agreements with manufacturers to obtain the vehicles they sell and to perform warranty work.  These franchise agreements are considered personal service contracts that may not be assigned to others.  Most franchise agreements include requirements such as:

• Timely submission of monthly financial statements to the manufacturer in a format dictated by them.
• Requirements to meet certain sales and service performance criteria.
• Expectations related to advertising and promotional activities that must be performed.
• Restrictions on areas such as changes in ownership, territories, and franchise rights.

Failure to meet the requirements of a franchise agreement can lead to termination of the agreement.

Dealerships must react rapidly to changing economic, regulatory, and technological factors.  A depressed economy generally will result in an increase in the sale of used vehicles and a decrease in the sale of new vehicles.  Consumers are keeping their vehicles longer and having them repaired rather than replaced.  As a result, service departments are becoming more important in the overall profitability for dealerships.  In addition, the use of internet shopping, comparative marketing, extended warranties, and no-haggle pricing have further complicated dealership operations.

There are a vast number of financing options available for vehicle purchases.  These options can often be overwhelming.  Vehicle leasing has grown in popularity because it can allow the customer to purchase a more expensive vehicle at a lower initial cost and lower payments.  Our professionals understand the different types of leasing options that include:

• Sales Type Leases
• Direct Financing Leases
• Open and Closed End Leases

Our experienced and dedicated dealership team is available to assist you in making your dealership more profitable and secure.

For more information, please contact us at 336-294-4494

Contacts for this Industry

Dan Hayes, CPA, Partner
Freddy Robinson, CPA, Partner
Tim Smith, CPA, Partner
Lory Hartmann, CPA, Senior Manager
Ron Hardison, CPA, Senior Manager