For auto dealerships, heritage runs deep. Approximately 80% of the 18,000 new-car dealerships across the U.S. are family-run businesses, according to the National Automobile Dealers Association (NADA). And despite recent industry consolidation, many are second-, third- and even fourth-generation businesses.

As with most family-run operations, a dealership’s name comes to mean something more than a sign on the building. It represents the family’s legacy and commitment to their community.

So, when it comes time to consider stepping away from day-to-day operations, dealer principals may wonder how they can ensure those foundational values continue beyond their tenure. It’s a concern shared by 77% of family business leaders, who rank “preserving the family’s legacy” as a top long-term goal, according to PwC’s Global Family Business Survey 2025. Here are three best practices to help dealer principals ensure the enduring success and seamless transition of their enterprise.

  1. Identify and educate potential successors.

For family businesses, succession planning sits at an intensely personal crossroads. Naming a successor is no easy feat — a reality acknowledged by 39% of North American family business leaders who, per Deloitte, rank succession planning for leadership transitions as their top governance challenge.

Succession planning should begin long before retirement. First, dealer principals should examine, simplify and solidify existing ownership structures, which will help minimize future confusion and intra-family conflict. It’s also important to have ongoing open discussions with family members about their career goals. Research from Deloitte shows that nearly half of the next generation expects to hold leadership or executive-level roles in their family’s business within five years.

From there, it’s about education and training. Most dealers require their children to earn a bachelor’s degree and attend NADA Academy. Some prefer to take their children under their wing, preparing them to eventually assume a leadership role, while others prefer their successors gain industry experience at a peer dealership.

  1. Add structure and enlist expertise.

An enduring legacy hinges on a combination of hard work, strategic adaptation and well-thought-out wealth management. To that end, having the right set of advisors — including attorneys, accountants, bankers and financial advisors — is critically important.

A cadre of specialists with outside perspectives can help dealer principals move beyond the often-insular family dynamics to bridge generational gaps and meet long-term goals. For example, an accountant can help ensure the dealership’s financial house is in good working order, establishing a foundation for the future generation’s best chances of success.

Additionally, dealerships have a long tradition of community involvement, from sponsoring youth sports to donating vehicles for fundraisers. According to NADA, new franchised auto dealerships donate half a billion dollars to charities annually. In this context, estate planning is a critical lever because it provides the legal and financial framework to keep those philanthropic aims going. Rather than try to navigate this process on their own, a dealer principal can tap a financial advisor to establish a family foundation, streamlining charitable contributions and ensuring philanthropic goals are upheld.

  1. Plan for contingencies.

After dedicating their lives to their business, dealer principals may find that family members pursue careers outside the family business. Again, this is where a team of advisors can be helpful. For example, by tapping an attorney to set up a family trust, ownership can remain in the family, even if a professional manager runs day-to-day operations.

Alternatively, a dealer principal may take steps to prepare for a potential sale to provide the family with financial security. The market has had favorable selling conditions, with buy-sell activity in the dealership space setting a record between June 2024 and June 2025, per a 2025 report from Kerrigan Advisors. To attract a good buyer, it’s important for dealer principals to cultivate and retain talent, as purchasers will likely want key leaders to stay in place. Then, it’s a matter of vetting potential buyers for culture fit, which is critical to safeguarding the family’s hard-earned legacy.

Dealerships are some of the best examples of multi-generational family-owned businesses, serving as a visible testament to the power of personal and community stewardship. As dealer principals consider what’s next, however, the preservation of this heritage becomes a paramount goal. Whether grooming the next generation or navigating a sale, strategic planning is essential to ensuring that the business’s profound impact lives on.

 

David Smith is a global commercial banking market executive at Bank of America