A record 462 transactions in the trailing 12 months shows sustained buyer demand for high-volume franchises despite softer dealership earnings.
On the Dash:
The auto dealership buy/sell market completed a record 462 transactions in the trailing 12 months through June, extending a run that has held steady even as dealership earnings soften, according to the newly released Second Quarter 2026 Blue Sky Report® from Kerrigan Advisors.
Dealers closed 224 transactions in the first half of 2026, up 2% from 220 a year earlier, running 107% above the 2015-2019 pre-pandemic average. Industry earnings fell between 10% and 20% year over year, yet buyers kept betting on long-term consolidation rather than pulling back. Record valuations for top franchises show dealers’ confidence in auto retail’s long-term growth, even as margins softened, said Erin Kerrigan, founder and managing director of Kerrigan Advisors.
Scale has become the primary driver of that activity, as buyers pay premiums for high-volume stores and groups with strong local market share. The announced sale of Hennessy Automobile Companies to Group 1 Automotive illustrates the trend. The $1.3 billion deal, the third-largest in industry history, included $1 billion in blue sky, a record for a 10-dealership group, backed by Hennessy’s $170 million average revenue per rooftop, more than double the national average.
Public dealer groups paid a record $119 million on average per acquired dealership in 2026, with 91% of those deals falling in markets where the buyer already operated. Trailing 12-month public group spending reached $6.0 billion, the second-highest level on record.
Despite softer earnings, the Kerrigan Blue Sky Index held at 178, 78% above its 2019 level. Domestic brands’ share of buy/sell activity slipped to 46% from 51% in 2025 as buyers chased import franchises, including Hendrick Automotive Group’s purchase of Foreign Cars Italia, adding Hendrick’s only Ferrari franchise.
Geography and technology are reshaping values too. High-growth states such as Texas, Florida and Georgia command premiums of up to 2.5 turns on blue sky multiples, while the Kerrigan Index of six public retailers rose 9.4% through July on investor confidence in AI-driven scale.
Kerrigan Advisors raised Kia’s multiple to 5.0x and upgraded Honda’s outlook, while downgrading Volkswagen to 2.25x-3.0x and Audi to 5.5x-6.0x amid weak demand. The average multi-dealership transaction now runs about $90 million, and scale, market position and technology increasingly define future value.
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 over 450 franchises generating more than $11 billion in client proceeds, including three of the largest transactions in auto retail history – the sale of Jim Koons Automotive Companies to Asbury Automotive Group, Leith Automotive to Holman, and Hennessy Automotive Companies to Group 1 Automotive (planned and expected to close in Q4 2026). 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 with 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®, which 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 monthly The Kerrigan Index™ composed 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 read the 2025 Kerrigan Dealer Survey, click here. To read the 2026 Kerrigan OEM Survey, click here. Kerrigan Advisors is also the co-author of NADA’s Guide to Buying and Selling a Dealership. Additionally, Kerrigan Advisors publishes a podcast, Beyond Blue Sky – A Kerrigan Conversation, where Kerrigan Advisors’ clients and industry leaders share the mindset, strategy and personal stories behind a once-in-a-generation transaction.
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