Dear Friends,

Truist dealer insider

Welcome to the Spring edition of the Truist Dealer Insider. With a strong start to 2022, dealerships are looking at how they can extend their impressive operating performance from this past year while keeping a sharp eye on valuations and opportunities in M&A.

We are truly in the Golden Age of automotive retailing—operating costs are down, gross and net margins are high, and the resulting cash balances can be used for improvements, acquisitions, or dividends. Interest rates, while moving upward, are still at historic lows, and retail demand may outstrip supply for years.

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What’s next? Michael Skordeles, Senior U.S. Macro Strategist at Truist Wealth looks at the key metrics for the U.S. economy, including the global events that we should all be watching. To prepare for the day when supply and demand are back in balance, Bill Jones, Head of Truist Dealer Retail Services looks forward to the trends and buying patterns we can expect from the ever-evolving automobile consumer.

M&A continues at historic highs, powered by sellers seeking peak values and buyers assured of the likelihood of post-sales profits. We’ll take an in-depth look at the dealership consolidation wave—including the M&A trends and buyer/seller behaviors behind it—with results from our annual Truist dealership valuation and buyer motivation survey. Thanks to all of you who responded to the survey!

We’ve also got the latest on the transition from LIBOR, including a review of the emerging benchmark rates and key milestones. Finally, Joe Magyar, CPA, of Crowe, LLP reports on the effect of shrinking inventories on tax bills and reviews strategies that may offer relief.

We’re in midst of exciting, yet volatile times in our industry. As you’re plotting your path forward, we invite you to draw upon the Truist team and the deep roots we’ve established in our local communities and in the dealership industry. We're uniquely positioned to provide the full spectrum of debt capital structuring, M&A strategy, indirect auto finance, and business and family transition planning to set you up for success. Let’s talk about ways we can help.

Meet the team

Jason W. Smith

Head of Truist Dealer Commercial Services
jason.w.smith@truist.com

Bill Jones

Head of Truist Dealer Retail Services
bjones@regacc.com

JT Taylor

Head of Automotive Truist Securities
Jt.taylor@truist.com

Articles in this issue

How long can the good times roll? It’s hard to say just how long, but we can be assured that at some point, things will change.

Prepare for the next era of automotive retailing

Featured article

A hot economy feels the pressure from inflation

A hot economy feels the pressure from inflation

Automotive News In the Driver’s Seat with JT Taylor, Truist Securities

Automotive News In the Driver’s Seat with JT Taylor, Truist Securities

Dealership M&A and valuation overview

Dealership M&A and valuation overview

Dealers bid “goodbye” to LIBOR. “Hello” to SOFR, BSBY.

Dealers bid “goodbye” to LIBOR. “Hello” to SOFR, BSBY.

Lower inventory levels could mean higher taxes for dealers

Lower inventory levels could mean higher taxes for dealers