Based on the biggest public auto retailers’ performance, the industry’s year has so far proved uneven, but on the front end of the fourth quarter there’s reason for optimism, save for one problem area, according to Kerrigan Advisers analysts.
The sell-side adviser, whose Kerrigan Index report follows the seven biggest U.S. sector players’ stock prices and market capitalization, says the third-quarter performances of all but one were essentially flat. The outlier illustrates the industry’s challenge as the year comes to a close.
The market cap of CarMax, the one of the seven companies that conducts only used-vehicle sales, plummeted about 33% in the quarter, its stock down 27% for a 47% year-to-date decline, revealing vulnerabilities in the used market, Kerrigan reports.
The firm points to falling demand, increasing used-vehicle interest rates, and used price declines from pandemic-era highs. It said CarMax’s sharp increase in loan-loss provisions signifies declining consumer credit conditions, a trend also reflected in the moves of two subprime lenders. Automotive Credit Corp. stopped offering new loans in August, Kerrigan says, while the following month Tricolor Holdings, which also sells used autos, filed for bankruptcy.
The used-sector developments could mean greater auto lender and regulator cautions, according to the report, which points out that Trump administration immigration policy impacted Tricolor’s focus on immigrant consumers.
Despite those challenges, the larger auto retail industry is looking up due to a clearer picture of U.S. trade tariff policy than when the year started, along with easing consumer finance pressure with the recent Federal Reserve interest rate cut.
“… dealers are well-positioned to capitalize on improving market dynamics in the quarters ahead,” the report 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 over 450 franchises generating more than $11 billion in client proceeds, including three of the largest transactions in auto retail history – the sale of Jim Koons Automotive Companies to Asbury Automotive Group, Leith Automotive to Holman, and Hennessy Automotive Companies to Group 1 Automotive (planned and expected to close in Q4 2026). 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 with 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®, which 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 monthly The Kerrigan Index™ composed 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 read the 2025 Kerrigan Dealer Survey, click here. To read the 2026 Kerrigan OEM Survey, click here. Kerrigan Advisors is also the co-author of NADA’s Guide to Buying and Selling a Dealership. Additionally, Kerrigan Advisors publishes a podcast, Beyond Blue Sky – A Kerrigan Conversation, where Kerrigan Advisors’ clients and industry leaders share the mindset, strategy and personal stories behind a once-in-a-generation transaction.
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