How the Big Beautiful Bill Helps Dealers Renovate Smarter
Renovating a dealership is one of the most visible and impactful investments a dealer principal can make. From refreshed showrooms to customer lounges and service waiting areas, these upgrades not only enhance the customer experience but also protect franchise compliance and brand image. The challenge has always been cost—renovations often require millions in capital, spread across long depreciation schedules that tie up cash flow.
Enter President Trump’s One Big Beautiful Bill. Passed with provisions designed to stimulate investment, this legislation introduces some of the most favorable tax treatment for business property in decades. For auto dealers specifically, it opens a window of opportunity to renovate smarter, save on taxes, and accelerate return on investment.
Restoring 100% Bonus Depreciation
The Big Beautiful Bill permanently restores 100% bonus depreciation for most qualified property acquired and placed in service after January 19, 2025. That means dealerships can deduct the full cost of qualifying property in the same year it is placed into service—rather than stretching deductions over 7, 15, or even 39 years.
For renovations, this includes Qualified Improvement Property (QIP) such as interior showroom updates, customer lounge enhancements, lighting upgrades, flooring, HVAC improvements, and other non-structural interior work.
Example: Renovating a Showroom
A dealer invests $2.5 million in showroom and lounge upgrades.
Under the old law, these costs would be depreciated over 15 years, yielding annual deductions of about $167,000.
Under the new law, the full $2.5 million is deducted in year one.
At a combined federal/state tax rate of 30%, this results in $750,000 in immediate tax savings.
This immediate expensing not only lowers taxable income but also puts real cash back into the dealership’s pocket, strengthening liquidity and financing flexibility.
Expanded Section 179
In addition to bonus depreciation, Section 179 deduction limits have been increased. This allows dealers to immediately expense smaller equipment purchases—like office furniture, IT systems, signage, or shop tools—up to generous thresholds. This is especially useful for smaller renovation projects or phased upgrades.
Why Now is the Time
Dealers know timing matters in every aspect of business. Renovations aligned with franchise image requirements or OEM mandates can be daunting, but with the Big Beautiful Bill in effect, these upgrades become significantly more tax-efficient. Structuring projects so that improvements qualify as QIP and ensuring assets are placed in service after eligibility dates are crucial steps to maximize benefits.
A Word from David Melton
"Having sat in the dealer’s chair myself, I understand the weight of a multimillion-dollar renovation. The Big Beautiful Bill gives dealers a chance to renovate smarter—deducting millions in costs immediately rather than waiting years for the tax benefits. It’s an unprecedented opportunity to align facility improvements with financial efficiency." — David Melton, President of Pointe Automotive
Key Takeaway
The Big Beautiful Bill transforms the economics of dealership renovations. Dealers who act strategically can lower their tax burdens, improve cash flow, and reinvest in growth while still meeting OEM facility requirements.