The buy-sell market is moving fast. On today’s episode of Inside Automotive, Erin Kerrigan, founder and managing director of Kerrigan Advisors, breaks down what’s occurring, how valuations and transactions are evolving, and what dealers can do to stay ahead of the curve.
According to the most recent Kerrigan Advisors survey, the largest of its kind with over 600 dealer participants, 41% of dealers said that the implemented tariffs are not impacting their business. Notably, domestic brands such as Ford, Chevrolet, and Stellantis have seen increased demand, while luxury brands like Porsche, Jaguar Land Rover, and Audi continue to maintain robust market interest despite supply challenges.
Additionally, Kerrigan notes that the recent interest rate reductions have had a less pronounced effect on valuations than might be expected. While larger dealer groups remain flush with cash, and credit spreads are historically tight, this means buyers have ample access to capital for acquisitions.
Consolidation is accelerating on both regional and national levels. Historical trends show the number of U.S. dealerships shrinks by roughly 50% every 30 years, and Kerrigan predicts the top 150 dealer groups will control 50% of industry revenue within 15 years.
In major metropolitan markets, consolidation is even more pronounced. In the top 10 fastest-growing U.S. metros, top groups own an average of 72% of luxury franchises, and in some markets, all Toyota stores are controlled by these large groups.
This environment is prompting dealers to adopt a more strategic approach to acquisitions. Many focus on expanding regional footprints while navigating competitive markets where top-tier buyers are already established. Kerrigan points out that dealers are increasingly leveraging private equity, family offices, and bond markets to support growth amid limited availability in high-demand regions.
Emerging OEM image programs, however, are creating potential valuation challenges. These programs, often requiring costly new facilities, can deter buyers or reduce returns on investment and compliance in the buy-sell process. As a result, dealers and buyers must factor these requirements into their strategic planning.
“I really do credit all of the associations for the hard work they do and believe it’s so important to support your association.”
Moreover, Kerrigan emphasized the importance of franchise laws and dealer associations in protecting business value. Dealers are encouraged to remain vigilant and engaged to ensure fair treatment and preserve the equity in their investments.
As the buy-sell market continues to evolve, Kerrigan predicts the combination of ample capital, strategic acquisitions, and regional consolidation will shape the next phase of dealership growth, creating both opportunities and challenges for dealers nationwide.
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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