A record number of car dealerships were bought or sold in 2025, a volume of deals driven in part by the industry’s substantial profit margins.
According to the newly released 2025 Blue Sky Report® by Kerrigan Advisors, there were 458 transactions last year, representing 688 car dealership franchises, a 5% increase over 2024 and a new annual record. The report also noted that over the last five years, more than 3,500 franchises were bought and sold nationwide — an estimated 15% turnover rate, nearly double the pace of the five years preceding the pandemic.
The market has been boosted by strong vehicle sales and pre-tax earnings of more than $4 million per dealership — 32% above pre-pandemic averages, according to the report. New vehicle gross profit per unit averaged $3,383 last year, 63% above 2019 levels.
“The industry’s earnings performance remains exceptionally strong, fueling buyer demand for dealerships and sustaining the pandemic era seller’s market, particularly for the top franchises,” said Ryan Kerrigan, managing director of Kerrigan Advisors, in a statement with the findings. “Many dealers continue to benefit from [original equipment manufacturers'] more disciplined inventory levels, higher new vehicle margins and robust fixed operations growth, all of which are contributing to sustained profitability above historical norms.
Not every dealership is the same. The highest-performing car dealerships can command big price premiums, while smaller dealerships or those with more-limited earnings see more-limited buyer interest, the report stressed.
The report also noted that the top markets for car dealerships increasingly are concentrated among the top car dealer ownership groups. That has resulted in an environment where demand and pricing for the strongest franchises continues to grow, while other brands face weaker interest and lower valuations.
The acquisitions of what are increasingly more-costly dealerships is being driven by an influx in outside money, according to the report. Since 2021, the number of dealerships owned by the top 150 groups backed by outside capital increased 52%.
In 2025 alone, roughly 10% of all franchise acquisitions were completed by buyers using outside capital partners — a figure Kerrigan Advisors expects to rise as the capital required to compete in a more technology-driven consolidated marketplace increases.
“The scale imperative as well as the rising acquisition costs for the most in-demand franchises are increasingly driving up the capital required to grow,” Kerrigan said. “Rather than ‘betting the farm,’ more dealer families with the management team and size to take on an outside investor are opting to diversify risk while preserving growth optionality by bringing on an institutional capital partner.
The upbeat market for car dealerships is only expected to improve, according to a separate Kerrigan Advisors survey of 525 car dealers from across the country. That report noted that 24% of dealers expect the value of dealerships to go up, while 16% expect values to decline. Additionally, 32% of dealers expect higher earnings, while just 20% predict lower earnings.
A report released earlier this year by The Presidio Group, which offers investment banking services, also detailed a strong market for car dealerships, with profits rising 3% in 2025 despite tariff hikes and an expiring electric vehicle tax credit. That report also found optimism about 2026, with 68% of those surveyed by the company expecting steady or growing profits.
“Our pipeline of deals is the largest we’ve seen, and with buyer appetite and resources still strong, we’re poised for both a robust year ahead and continued consolidation well into the future,” said George Karolis, president of The Presidio Group, in the report. “Sellers who had been on the sidelines are returning to the market, motivated by a desire to realize value while dealership earnings and buyer demand is strong.
Kerrigan Advisors is the leading sell-side advisor and thought partner to auto dealers nationwide. Since its founding in 2014, the firm has led the industry with the sale of more than 300 dealerships generating more than $10 billion in client proceeds, including two of the largest transactions in auto retail history – the sale of Jim Koons Automotive Companies to Asbury Automotive Group and Leith Automotive to Holman. The firm advises the industry’s leading dealership groups, enhancing value through the lifecycle of growing, operating and, when the time is right, selling their businesses. Led by a team of veteran industry experts with backgrounds in investment banking, private equity, accounting, finance and real estate, Kerrigan Advisors is the only firm in auto retail exclusively dedicated to sell-side advisory, providing its clients the assurance of a conflict-free approach.
Kerrigan Advisors monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report®, the industry authority on dealership buy/sell market trends and valuations and includes Kerrigan Advisors’ signature blue sky charts, multiples and analysis for each franchise in the luxury and non-luxury segments. To download a preview of the report, click here. The firm also releases The Kerrigan Index™ comprised of the seven publicly traded auto retail companies with operations focused on the US market. The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here. To read the 2024 Kerrigan Dealer Survey, click here. To read the 2025 Kerrigan OEM Survey, click here. Kerrigan Advisors also is the co-author of NADA’s Guide to Buying and Selling a Dealership.
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