Buying and Selling Car Dealerships and Automotive Businesses

Buying or selling a car dealership is not a typical small‑business transaction. Dealership deals often involve multi‑million‑dollar purchase prices, complex relationships with manufacturers and floor‑plan lenders, and significant real estate and employment issues. DiTommaso Lubin, P.C.’s Business Purchases & Sales Practice Group represents buyers and sellers of new‑ and used‑car dealerships and related automotive businesses throughout Illinois and the Midwest.

Our lawyers have decades of experience representing car dealers in a wide range of matters, including litigation, franchise disputes, consumer‑fraud claims, and dealer‑termination cases. That industry knowledge informs our work on dealership acquisitions and sales.

Helping Buyers of Dealerships

For buyers of dealerships and automotive businesses, we typically:

• Advise on deal structure (asset purchase, stock or membership‑interest purchase, or combined structures).
• Conduct due diligence focused on franchise agreements, dealer‑sales and performance metrics, customer‑satisfaction data, consumer‑fraud history, regulatory inquiries, warranty‑chargeback issues, and manufacturer standards.
• Review and negotiate purchase agreements, real‑estate contracts or leases, and financing documents.
• Address manufacturer‑approval requirements and timing, including any conditions relating to facilities, capitalization, and management.
• Draft and negotiate non‑competition and non‑solicitation agreements with sellers and key managers, ensuring that they are enforceable and appropriately tailored to the dealership’s market area.
• Coordinate closing and post‑closing transition issues, including assignment of key contracts, vendor relationships, and employment matters.

Helping Sellers of Dealerships

For sellers, we focus on:

• Preparing the business for sale, including reviewing financials, key contracts, and potential issues that may arise in due diligence.
• Structuring transactions to allocate risk appropriately, including the scope of representations and warranties, caps and baskets on indemnity, escrows and holdbacks, and any earn‑out provisions.
• Negotiating letters of intent and definitive purchase agreements, with attention to closing conditions and termination rights.
• Addressing real‑estate issues, including sale‑leaseback transactions, assignments of leases, and environmental matters.
• Coordinating with manufacturers and lenders to obtain necessary consents and releases.

Litigation Arising from Dealership Purchases and Sales

Our litigators are familiar with disputes that can arise out of dealership purchases and sales, including:

• Fraud in the inducement claims based on allegedly overstated sales, inflated profitability, or concealment of warranty or chargeback issues.
• Claims that a seller breached financial or operational representations and warranties in the purchase agreement.
• Disputes over earn‑outs tied to post‑closing sales or profitability, including allegations of manipulation of performance metrics.
• Conflicts over non‑competition agreements and enforcement ancillary to a dealership sale.

Because we already represent dealers in consumer‑fraud, franchise, and dealer‑termination matters, we understand how problems in those areas can affect the value of a dealership and lead to disputes between buyers and sellers.

Talk With Our Dealership Purchases & Sales Team

If you are considering buying or selling a dealership or automotive business—or are involved in a dispute arising from a dealership transaction—speak with our Business Purchases & Sales Practice Group.

Contact attorney Peter S. Lubin or attorney James V. DiTommaso for a free consultation.

Call 630-333-0333 or reach us through our online contact form.

This page is for informational purposes only and does not constitute legal advice. Contacting us does not create an attorney–client relationship. Past results do not guarantee a similar outcome.