Since 2006, partners Ron Schwartz, Donny Bohn, Scott Bohn, Bob Cannon and Tobias Fulton successfully operated Cowboy Toyota in Dallas. In 2024, the partners hired Kerrigan Advisors to represent them in the sale of their highly valuable dealership. Dallas-based The CAR Group – which is ranked 23rd in the Automotive News Top 150 Dealership Groups listing – purchased Cowboy Toyota in October 2024.
Ron Schwartz: We have all been in the car business for well over 35 years. Our lives have changed dramatically during that period, as our children grew up, left the house and started having their own kids. Some of my partners wanted to travel more with their spouses, while others wanted to spend more time with grandchildren. Collectively, we felt the timing could not have been better to sell our dealership and prepare for the next chapter of our lives. Managing the business has also changed dramatically in the last decade and in some ways has created more stress than we felt we needed at this stage of our lives. As we’ve aged, health, travel and more time with family have really become our top priorities, so it was clear that it was time to sell and retire.
Schwartz: Back in the 1980s, it was the wild, wild West in the car business! But as crazy as it sometimes was, the business was much simpler. In today’s environment, with increased oversight and government regulatory pressures, the cost of doing business has gone up and it can create some sleepless nights. Today, there is so much more oversight into everything you do, with very little room for error. One hiccup can cost you a million dollars. The internet wasn’t around back in the day, and you certainly didn’t need to buy cyber insurance! The costs have risen along with regulatory pressures, which has made the industry less entrepreneurial and limited how you can operate. It is all a lot harder, especially if you only own one dealership like we did.
Schwartz: We see the ability to keep up with technology, advertising expenses and store compliance as significant challenges. The key is scale, scale, scale. We were like a small bank. We did well and our customers and employees loved us, but we couldn’t compete with what the mega banks (i.e., the large dealer groups) had to offer. One advantage we did have over the publics and large auto groups was that we could turn on a dime and cut expenses when needed. Going forward, I believe smaller dealer groups are going to get pushed out of the major markets to more rural or small markets. In a few decades, the major metro areas will be served almost exclusively by the largest dealership groups.
"At today’s blue sky premiums in Texas, a sale makes a lot more sense for a single point dealer than trying to compete with massive consolidators." — Ron Schwartz
Schwartz: I do, but single-store owners will struggle to produce the profitability that the big auto groups can produce. The lack of synergies will be exposed (advertising costs, accounting costs and employee benefits), especially in major metro markets. I think dealers who want to own one or two dealerships will have to do so in the smallest markets, where there are fewer national players.
Schwartz: Historically, there was very little turnover in our big Texas markets. Today, because Texas is so much more attractive than a lot of markets, buyers are flocking to our state and offering premium blue sky values to stand-alone dealers like us. More of the big stores now are owned by public companies or massive private dealer groups. We sold because it is hard for us to compete with these big groups. The cost savings they get are significant. At today’s blue sky premiums in Texas, a sale makes a lot more sense for a single point dealer than trying to compete with massive consolidators.
Schwartz: With Trump’s win, I believe he will relieve the pressure on OEMs and dealers regarding electric vehicles (EVs) and re-evaluate the proper direction for EVs in this country. OEMs will hopefully be free to build what people want, not what regulators demand. Ultimately, that is good for the car business. We need to listen to the consumer and provide them with the vehicles they seek to drive, not mandate their preferences. I think Trump will help fix this EV situation for the better. That is a good thing for car sales and days’ supply of inventory, which has increased dramatically for some franchises, though not for Toyota.
Schwartz: Toyota didn’t just jump on the EV craze. They knew it did not make sense, so they took an alternate route, focusing on hybrids – and it has paid off! I know from my last four years on the Toyota National Dealer Council that the executive team at Toyota Motor North America Inc. (TMNA) is by far the best in the industry. They have always listened to their dealers and the Dealer Council regarding what our customers want. Whether they act upon it or not, they listen to us. No other OEM does that. Toyota wisely never went all-in on EVs; instead, they leaned into hybrids and now 50 percent of their sales are electrified vehicles. That proved to be the right strategy. Toyota is simply the best franchise in the business, hands down.
Schwartz: Thirty-seven years of working six days a week was not the hardest part about selling, but it was hard to think about leaving the employees, customers and camaraderie we created over nearly four decades. I have had the same routine for so long, and now I do miss the routine and my team. Many of my dearest friends are employees and we wish them all nothing but the best as they continue in the car business. I consider them my friends and that is the hardest part about selling. There are also my relationships with Gulf States Toyota and TMNA – these are people I worked with for years and it feels strange to not interact with them on a daily or weekly basis. So, missing the people is definitely the hardest part of retiring and the sale.
Schwartz: The auto industry is very resilient, but the difference between winning and losing will become more pronounced in the future. The great thing is that this industry isn’t going anywhere, and it will take care of retail customers for decades to come. I think car sales are going to remain steady, if not increase slightly in 2025. The big challenge is vehicle pricing. There are going to have to be a lot of incentives or re-pricing of these products. Average carrying cost of new vehicles is getting tough for Americans to handle and some OEMs will need to get back to producing smaller and more affordable cars.
Schwartz: I have never met someone with Erin Kerrigan’s knowledge, connections and understanding of market dynamics. The success of our transaction was a direct result of her expertise and personal touch. Her level of commitment to “get it done” should be included in college marketing books. I interviewed her and Marie Brashears, and I realized they were definitely who we wanted to represent us. You know you are dealing with a great company when everyone that you work with is a 10 out of 10 in terms of knowledge and understanding about our ultimate goal. I don’t put my name down for a lot of recommendations, but Kerrigan Advisors are all-stars in this industry! Their team has been unbelievable. They do it right. They have the best of the best and they work so hard for their clients every step of the sale – no other broker comes close.
Kerrigan Advisors is the leading exclusive sell-side advisor and thought partner to auto dealers nationwide. Since its founding in 2014, the firm has led the industry with the sale of over 280 auto dealerships representing $9 billion in client proceeds, including the third largest transaction in auto retail history – the sale of Jim Koons Automotive Companies to Asbury Automotive Group. Kerrigan Advisors advises the industry’s leading dealership groups, enhancing value through the lifecycle of growing, operating and, when the time is right, selling their businesses. Led by a team of veteran industry experts with backgrounds in investment banking, private equity, consulting, accounting, finance and real estate, we not take listings nor do we employ a brokerage model; rather we develop a customized sales approach for each client to achieve their personal and financial goals. In addition to the firm’s sell-side advisory services, Kerrigan Advisors also provides a suite of automobile dealership consulting and investor services including growth strategy, market valuation assessments, capital allocation, transactional due diligence, open point proposals, operational improvement and real estate due diligence.
Kerrigan Advisors monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report®, the industry authority on dealership buy/sell market trends and valuations and includes Kerrigan Advisors’ signature blue sky charts, multiples and analysis for each franchise in the luxury and non-luxury segments. To download a preview of the report, click here. The firm also releases The Kerrigan Index™ comprised of the seven publicly traded auto retail companies with operations focused on the US market. The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here. To read the 2023 Kerrigan Dealer Survey, click here. To read the 2024 Kerrigan OEM Survey, click here. Kerrigan Advisors also is the co-author of NADA’s Guide to Buying and Selling a Dealership.
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