I've done this before and yes it indeed does help with local searches.
From what I understand, when someone searches for let's say a used car dealer, google automatically get's their location by IP and in a sense searches for used car dealer los angeles if their geographic location is los angeles.
Now if you are targeting keywords w/ geo location, then you'll do a little better. But like I said it depends on what your website is about. This usually relates better to real businesses like, car dealers, restaurants, specific service businesses etc.
Im targeting my local town for web design, my main keyword is Web Design Crawley. im page one on Bing lol but ranked 396th on Google im the bottom of page 3 when viewing a 100 searches. Also my sh1t portfolio ranks way higher than my new website that is better in every way in terms of content and SEO
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