With valuations holding steady and consolidation accelerating, dealers are entering the second half of the year with cautious optimism. In today’s episode of Inside Automotive, Erin Kerrigan, managing director of Kerrigan Advisors, joins host Jim Fitzpatrick to discuss the trends driving the current buy-sell market.
Despite a pullback in new-vehicle sales, the buy-sell market remains active. May’s SAAR dropped to 15.6 million, down from stronger performances in March and April. June is also expected to soften. Kerrigan attributes the slowdown primarily to the consumer-side hesitation as affordability challenges persist.
Still, dealers remain optimistic. New-vehicle inventory declined 10% year-over-year in May, but the current days’ supply is hovering around 60 days—a healthy level by industry standards. Kerrigan notes that tighter inventory often results in more substantial margins as scarcity naturally boosts demand. Finished vehicle shipments also fell 9% year-over-year, primarily due to tariff-related disruptions.
Tariff impacts, while affecting inventory flow, have yet to influence dealership valuations. Kerrigan expected the situation to ease by the end of the summer, with OEMs likely absorbing more of the cost, as consumers cannot afford to take on additional pricing pressure.
The Kerrigan Index, which tracks public dealership group valuations, is up 4% year-to-date, reaching 918.91. That’s roughly double the rise of the S&P 500 this year. Public companies have seen strong gains, with Sonic Automotive up 21%, Penske Automotive up 11% and AutoNation up 8%.
Private valuations remain steady as well. The Kerrigan Blue Sky Index remains 70% above pre-pandemic levels and has held steady since the end of 2024. While individual franchises may see fluctuations, overall dealer profitability remains high.
Consolidation remains a defining trend in the buy-sell market. Kerrigan Advisors reports that the top 150 dealership groups now average $2.7 billion in annual revenue—roughly 22 times more than their smaller counterparts—and account for a third of the industry’s market share. In major metros, standalone stores and small groups are becoming less common as strategic acquisitions accelerate.
Market dynamics are increasingly influencing franchise valuations. When a territory has only one unaligned store for a high-demand brand, its strategic value increases significantly.
Policy changes are also shaping buy-sell behavior. With the California Air Resources Board (CARB) waivers revoked, the 12 states that followed its stricter mandates are no longer bound by zero-emission targets that limited ICE vehicle sales. Under the mandates, OEMS faced caps on gas-vehicle sales, threatening dealer revenue in those states. Kerrigan’s firm had already observed hesitancy among buyers in those regions, who were uncertain about meeting the stringent EV volume requirements.
"The microeconomic impact of each market is driving valuation a great deal. We're starting to get into this 'chess rather than checkers' market dynamic." – Erin Kerrigan
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 295 dealerships generating more than $9 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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