Auto Dealers | August 2025 Scenario planning helps auto retailers prepare for ongoing uncertainty

Detailed financial modeling creates a map to get you where you want to go. By considering multiple scenarios, you can plan for what comes down the road. In addition to providing a clear path, this approach lets you focus on what you can control rather than worrying about what you can’t. Here’s how it works:

• Devise strategies with your advisor that play to your business’s advantages to determine the best route to your goal.
• Stress test your plan to challenge your assumptions.
• Update your model to meet current economic conditions and account for other forces that may affect the auto retailing business.
• Ensure that your business and personal goals stay aligned by considering the interactions between business actions—acquisitions, real estate investments, strategy shifts, etc.—and personal financial moves—retirement preparation, succession forecasting, estate planning, etc.

Having worked through your plans and stress-tested your models, you can react faster to emerging conditions—whether that’s an acquisition opportunity, a shift in your margins, or a change in demand. Dealers who have been through the planning process are more prepared to act when the time is right.

Where do you want to go? Examine your business and personal objectives—it’s an essential first step. Gain clarity by asking these questions:

• What are your business and personal goals over the next five to ten years? If you have partners or successors, are your goals aligned?
• Do you have the financial and intellectual capital (people and talent) to achieve those objectives?
• Are future generations properly prepared to fulfill their future roles in the business? If not, what happens?

Take time to discuss and document key aspects of your business. Some may be more relevant to your situation than others, but it’s important to address each as part of a complete plan:

Competitive strategy

• Are you in the right markets with the appropriate brand mix?

Growth and acquisition strategy

• How do you assess new markets and how far can you extend your geographic reach?
• Are add points an option? Are you cultivating your manufacturer relationships to position for them?
• How do you interact with potential sellers and position your dealership as a buyer of choice?

Potential divestitures

• How do you assess underperforming stores?
• Have you pruned your portfolio as necessary?

Capital strategy

• Do you have an efficient, robust capital strategy that is quickly and easily scalable?
• Do you have access to financial resources to withstand an unexpected economic shock?

Talent strategy

• Have you developed enough management bench strength to manage the complexities of acquisitions of new stores or brands?

Ownership, succession, and exit plans

• Are you considering an exit at some point in the future? What type of planning are you doing now to prepare for that exit?
• Do you have clear plans for transition?
• How prepared is the next generation for the role they’ll have in the business going forward?

Detailed modeling helps guide future decisions and is the key to preparing your business for handling whatever comes. The scenario planning you do now, including modeling and stress-testing possible outcomes, will put you in a better position to act quickly when challenges emerge or opportunities surface.

The tools and skills for long-range planning aren’t used every day, and detailed financial modeling takes time. With day-to-day demands, scenario planning can often take a backseat to other priorities for dealership CEOs and CFOs. That’s why it’s important for leaders to carve out time to build detailed models incorporating factors like cost of capital, economic volatility, and auto retailing trends, while adjusting for business risk.

Work with an expert partner like Truist to help you develop more sophisticated models, aligning you with a consistent and dependable capital provider. As you and your advisor build scenarios, consider:

Current capital structure. Take a broad look at your dealership’s capital structure. Can you strengthen your capital base and improve your access to capital? Do you have bilateral relationships with commercial banks and captives? Have you considered loan syndication to provide ready access to committed capital needed to fund growth projects quickly and efficiently?

Future capital requirements. Do you have the capital you’ll need to facilitate planned growth like real estate projects, facility upgrades, relocations, expenditure on furniture, fixtures, and equipment, or other growth activities? Do you have ready access to capital to support acquisition-based growth?

Other financial needs. Think through financial demands both within the dealership and outside your business. Include estate planning, tax strategies, personal interests, and philanthropy plans. Is your family’s portfolio of wealth investments properly diversified?

Assumptions about the economy and industry. Effective planning includes getting an outside perspective on the overall economy, the auto retailing industry, and moves by other dealerships. Truist can help, sharing expert insights on what’s most relevant for your business, outlining the implications for your planning. Our analysis includes dynamic concerns such as consumer trends, economic forecasts, M&A opportunities, dealer best practices, and geopolitical issues. We help you look around the corner to anticipate what comes next.

Effective models don’t have to be complex. It only takes a handful of key data points to develop a useful model—one that guides sound decisions while avoiding overly complicated analysis.

Truist’s modeling process for dealers begins with a clear understanding of the dealership group’s current capital structure, a summary of historical revenue and profitability, any pending acquisitions, and the key drivers of future free cash flow—including upcoming capital expenditure needs, tax assumptions, and planned discretionary distributions. This data forms the foundation for building the initial model, which will guide future discussions and scenario analysis.

Working with the Truist Dealer Services team offers you access to deep industry knowledge that ranges from corporate finance to M&A and from wealth management to treasury services. Our collaborative approach involves working with your leadership team to build out the models and tools you’ll need to make informed, long-term decisions that minimize risk and grow enterprise value and generational wealth.