Today’s Find: Car Subscription and Used Auto Dealership
The Deal: A successful car subscription and used auto dealership in Florida's thriving Broward County market. This is an auto fleet built for recurring revenue.
The Price: $6,500,000 (Includes $4.48M in recoverable vehicle inventory.)
The Metrics:
Revenue: $4.2M
SDE (Cash Flow): $1.07M
Effective Operating Multiple: 1.89x SDE (Removing the inventory value - needs to be diligenced!)
The Core Thesis: Buy Cash Flow at a Discount
The key to this deal is not the $6.5 million price tag, but the true value of the operating business. Once you separate the $4.48M in fleet inventory (a recoverable asset you can finance) from the price, you are buying the core operating business—the management systems, the contracts, and the sales channel—for only about $2.02 million, net of inventory. Obviously that’s a big assumption…
The Capital Moat: Building a fleet of this size requires huge upfront capital. That $4.48M inventory cost is a massive barrier to entry that prevents almost all small competitors from replicating the model.
The Convenience Moat: The subscription model's "no hassle, swap anytime" promise creates a powerful switching cost. Customers are locked into convenience, securing predictable monthly revenue for the owner.
The Arbitrage: The dual model is brilliant: cars generate high-margin recurring income, and when they come off the subscription cycle, they are immediately sold through the in-house dealership. This maximizes the revenue generated by every single asset and minimizes depreciation loss.
The Risk Check
The Inventory Bomb: The greatest risk is a sudden collapse in used car values. This would erode the $4.48M asset base and destroy the margin on the resale side. The buyer must be comfortable managing asset risk.
Operational Complexity: Running a subscription model, managing a high-value fleet, and running a dealership requires extremely disciplined and sophisticated logistics, maintenance, and credit management.
The Conclusion
If the diligence checks out, this is an interesting one. Opportunity to buy a cash-flow-rich platform at a massive discount because the deal is disguised by a large, financeable asset base. Obviously that’s a huge area to dive in…
Interested in learning more? Reach out and we’re happy to connect you with the selling broker.
Until next time,
