First-half transactions reflect continued high appetite for acquisitions despite falling profits, the most sought-after franchises bringing record prices.
Despite all kinds of unknowns in the economy and on the geopolitical scene, or maybe partly because of them, the sale of auto dealerships continues on the upswing.
Buy-sell activity on a trailing 12-month basis exceeded that of a year earlier, according to sell-side broker Kerrigan Advisors, which said it sees no reason for a pullback for the rest of the year.
The firm recorded 224 dealership transactions in the first half, up 2% year-over-year and 107% above the prepandemic average, the firm said.
Dealerships are also commanding ever-higher prices, publicly held auto groups’ purchase prices so far this year reaching a record $119 million per store.
On the high end of the buy-sell scale, Kerrigan pointed out the offer by Penske Corp. and Mitsui & Co. to take Penske Automotive Group private, which it said would set another industry record with group value of $13.8 billion.
The robust activity and high transaction prices contrast with declining dealership profits. In the first half, Kerrigan calculated that average store earnings fell up to 20% from a year earlier depending on the franchise and market.
The decline came on increased operating costs and falling vehicle gross margins, even as average revenue was up to a record $38 million, the firm said.
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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