Dealership acquisitions in 2026 are poised for record activity as confidence in valuations and earnings strengthens across the industry. On today’s episode of Inside Automotive, Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors, provides a detailed outlook on this year’s automotive buy-sell market and how emerging factors such as AI are shaping dealership acquisitions.
Dealership transactions in 2026 are expected to remain strong, with the potential to surpass previous annual records. Survey results from Kerrigan Advisors indicate a significant shift in dealer sentiment: for the first time since 2021, more dealers view valuations and earnings positively. This optimism is driving both sellers and buyers to the market. Higher confidence in dealership earnings encourages more owners to list their stores, while buyers anticipate stable or growing performance, creating favorable conditions for transactions.
Large group acquisitions and “mega deals” are likely to increase. Capital markets remain strong, and dealer groups continue to have substantial liquidity from prior earnings. Financing options, including lower-interest debt and bond issuances, support acquisition activity. Kerrigan notes that prior limitations on large-scale transactions were primarily supply-driven rather than demand-driven, suggesting that larger deals will emerge as sellers respond to favorable market conditions.
Geographically, the southern U.S. remains the epicenter of dealership consolidation. States like Florida and Texas attract high demand due to population growth, favorable tax structures, and market stability. Regional consolidation also continues, with dealers seeking to dominate their local markets by acquiring additional stores within their operating territories.
AI adoption is emerging as a consideration in dealership operations, with early indicators showing efficiency improvements in both sales and expense management. While AI is not yet a formal factor in dealership valuations, top dealer groups are integrating AI into fixed operations, variable operations, and marketing functions to enhance performance. Improved operational efficiency through AI is expected to become an increasingly important factor in future acquisition assessments.
Franchise valuations are shifting across the industry. Domestic brands, influenced by U.S. tariff policies, show improved valuation expectations relative to imports. Chevrolet, for example, has emerged as a franchise with rising valuation expectations, surpassing Hyundai, which faces declining trust and valuation sentiment. Volkswagen franchises have underperformed due to competitive pressure from Chinese OEMs, operational challenges, and limited U.S. manufacturing presence. Porsche remains strong but faces challenges at the parent company level. Stellantis shows the most significant improvement in dealer sentiment, with a notable shift from declining to stable or positive valuation expectations. Dealers report increased confidence in new leadership, pricing strategies, and product realignment.
Kerrigan emphasizes that dealership buy-sell transactions are evolving toward more sophisticated structures, moving away from informal or “back-of-the-napkin” approaches. Modern deals increasingly mirror corporate mergers and acquisitions, incorporating complex terms and structured financing. Dealers must adapt to these evolving transaction practices to remain competitive in the buy-sell market.
Kerrigan Advisors will host two sessions at the 2026 NADA Show. The Auto Team America Buy-Sell Summit panel, featuring insights from large consolidators on managing multi-store groups, takes place February 3 from 8 a.m. to 1 p.m.
Kerrigan will also lead a workshop on February 4 at 3:30 p.m. in the convention center, covering modern deal structures, franchise valuations, and the impact of AI on dealership acquisitions.
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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