Through the first half of 2025, the U.S. new-car franchise network is remarkably stable, in terms of franchises and dealership rooftops. But the rest of 2025 and 2026 could bring changes due to tariffs on imports and the planned end of the $7,500 tax incentive on electric vehicles after Sept. 1, according to Urban Science.
“I think the mix is going to be different” later this year and next, even if the number of dealerships remains relatively steady, says Mitch Phillips, global director, data, for Detroit-based Urban Science.
That is, “the mix of vehicles dealers will put in the showroom, based on what fuel type the consumer demands,” can be expected to change, although right now the precise outcome is anybody’s guess, he tells WardsAuto.
Steady as She Goes
In terms of overall numbers, the U.S. new-car dealer network is rock steady, considering all the changes hitting the retail industry. In addition to import tariffs and the coming end of federal subsidies for EVs, affordability is an issue across the board.
In total, there were 18,393 new-car dealership rooftops, including both multi-franchise stores under the same roof and exclusives, as of July 2025, according to the Urban Science Mid-Year Automotive Franchise Activity Report. That’s almost exactly flat vs. year-end 2024, an increase of just 19 dealerships, or 0.1%.
In the same time frame, the number of new-car franchises is 29,813, down 311 franchises, or 1%, vs. year-end 2024. Urban Science is a leading automotive consultancy and technology firm that serves OEMs and dealers, and the companies that support them.
The Biggest Little Changes
With the dealership headcount changing so slowly, it’s hard to draw too many conclusions from the midyear report, Phillips says.
Having said that, the state with the most new dealerships is Texas, with a net increase of seven. That’s a lot, considering the whole country managed a net increase of only 19 stores in the first half of 2025.
The Texas increase is no surprise. Dealership M&A experts report Texas is one of the most sought-after markets, due to the size of the market, the weather and the state’s go-go, pro-business regulatory climate.
Shopping List
“Dealerships located in high population growth markets, such as Florida and Texas, command premium blue-sky multiples, while those in contracting geographies have lower buyer demand and discounted blue-sky multiples,” Erin Kerrigan, founder and managing director of Kerrigan Advisors, says in a separate report on second-quarter dealership buy-sells.
“Blue-sky” refers to the value of a dealership over and above its physical assets.
Other states with large dealership increases include Louisiana, Michigan, North Carolina and New Jersey, each with a net increase of four dealerships, Urban Science says.
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 $9.5 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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