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Dealership Market Expects Rebound

The 2020 auto dealership buy/sell market declined in the first quarter, falling 9.3 percent off 2019’s transactions pace as the COVID-19 pandemic took its toll on auto retail, according to the just-released First Quarter 2020 Blue Sky Report by Kerrigan Advisors. Transactions slated to close at the end of the quarter were postponed, renegotiated or, in the worst case, terminated. However, the report indicates that blue sky values are not dramatically impacted and, with auto sales due for an uptick, a buy/sell rebound in the second half of 2020 is anticipated.

However, Kerrigan Advisors expects the second quarter of 2020 to be the slowest buy/sell market in recent history due to pandemic stay-at-home orders.

Among the franchises being acquired, domestics continued to dominate in the first quarter of 2020, representing 57 percent of buy/sells, up 84 percent since 2015. Domestic dealership buy/sell market share is now consistent with franchise market share. Kerrigan Advisors expects domestics to dominate the 2020 buy/sell market, as multi-generation dealer families decide to sell post-pandemic. Additionally, import luxury’s buy/sell market share increased in the first quarter to 18 percent, up 12.5 percent over last year.

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