From record transaction volume to AI and Chinese automakers, Kerrigan Advisors founder Erin Kerrigan explains what is moving the market and what is coming.
A record number of car dealerships are changing hands in 2026, driven by aging owners cashing out at peak values while a new generation of buyers zeroes in on the right stores in the right markets. It’s creating a rare economic environment for dealers to buy, sell, or reposition their business if they move fast.
Joining us on this episode of CBT Now is Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors, one of the most active sell-side advisory firms in auto retail. From aging owners to AI and potential Chinese-made competition, Kerrigan says understanding what’s fueling this hot market is the key to making the right move.
The U.S. auto dealership buy-sell market is on pace to shatter records for the fifth consecutive year, with more than 115 transactions closing in the first quarter of 2026 alone, according to Kerrigan Advisors. Retiring owners, motivated buyers, and strong valuations are pushing the market to record levels. Kerrigan says her firm is seeing more dealerships looking to sell than at any point in its history, as buyer interest also continues to climb.
Most of the sellers entering the market today are family-owned groups where the founder is ready to retire, Kerrigan says. Many times, she says, the next generation is not ready to take over, or doesn’t want to.
“Most of it is families, and they, like our client, the Beardmore Automotive Group, they were fourth generation. They were looking at the fifth generation. The fifth generation just really did not want to take over the business and continue on,” she said.
Other dealers are looking to cash out while the market is hot. With valuations still strong and buyer demand at record levels, many owners are deciding that now is the time to sell, Kerrigan says.
“We are once again tracking to a new record, which every time I say this, I can't believe it continues on, but it is.” - Erin Kerrigan, Kerrigan Advisors
The biggest buyers in auto retail, Kerrigan says, are getting more selective about how and where they grow, with premium brands attracting the most attention. Toyota, Lexus, Mercedes, BMW, Honda, and Subaru dealerships are among the most sought-after franchises.
The largest consolidators are focused on locking up those brands in markets where they already operate, she says. In 2025, 94% of acquisitions by public dealer groups were in markets where they already had a presence. Ownership groups are filling gaps in their home markets before looking anywhere else, she says.
“I like to say we as an industry are transitioning from a game of checkers to chess. And now there are only so many chess pieces in each market,” Kerrigan said.
Groups that are strategically expanding are also selling stores that no longer fit their plan and reallocating that capital to new markets and priority franchises. Stellantis and Nissan stores made up a large share of those sales as dealers cut ties with those brands to focus on other franchises.
The top 150 groups owned fewer stores than the year before, yet their revenue increased. Kerrigan says they grew their market share by focusing on their highest-volume stores and cutting underperforming stores.
“We also found that the revenue per dealership rose to over $90 million. So, almost a 6% increase from 2024. And NADA’s average increased just 4%… They’re acquiring the highest volume stores, and they’re driving volume in their existing stores,” Kerrigan said.
For the top 20 groups, the gains were even larger. They grew revenue by 11%, hitting nearly $100 billion. That growth, she says, comes from high-volume stores, not increasing store count.
As artificial intelligence becomes more commonplace in dealerships, Kerrigan expects it could affect valuations, but she hasn’t seen it in the marketplace just yet.
The largest dealer groups are already using AI to cut personnel costs, but that hasn’t had an impact on what buyers are willing to pay, she says. But it’s something she expects to shift in the next year as buyers start projecting higher future earnings based on lower operating costs.
Kerrigan points to Carvana as a brand to watch as it continues to move into the physical dealership space.
“Carvana just acquired its seventh dealership. And Carvana is very much leaning into AI. And I think they said that 30% of their sales don’t even have any human interaction,” Kerrigan said.
If a buyer can walk into an acquisition knowing they can cut 25% of operating expenses through AI, they may be willing to pay a higher price for that dealership. It’s not here yet, Kerrigan says, but it’s coming.
Chinese-made cars aren’t sold in the United States right now, but they are everywhere else. Kerrigan cautions U.S. dealers not to mistake their absence for irrelevance.
In 2026, one in five vehicles sold globally was made by a Chinese automaker. In the UK, Chinese brands hold 15% market share. In Europe, the number is around 10%. They are available in Canada and Mexico, and Kerrigan thinks eventually they’ll be sold in the U.S.
“I would be shocked if we didn’t have Chinese EVs or Chinese vehicles in our country. They’re not here now, but I think it would, I think it’s naive not to think that they could come,” Kerrigan said.
Most dealers Kerrigan talks to say they would take on a Chinese franchise in a minute if one became available. It’s something smart dealers need to keep a close eye on, she says, so they’ll be ready to take action when, and if, the landscape shifts.
For dealers thinking about selling, Kerrigan says the time is now. For those on the buying side, the window is open, but it’s getting more competitive by the day. AI integration and competition from Chinese automakers could soon create big shifts in the landscape. Dealers who make the right moves now are the ones who stand to gain the most.
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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