Despite ongoing concerns surrounding affordability, interest rates, and uncertainty in the Middle East, the dealership buy-sell activity is moving in the opposite direction. Joining us on today’s episode of Inside Automotive is Ryan Kerrigan, Managing Director of Kerrigan Advisors, to discuss record franchise turnover, rising valuations, and what’s driving continued momentum in the 2026 dealership M&A market.
According to Kerrigan, the buy-sell market is running at full speed, with franchise sales up 21% in the first quarter of 2026 compared to the same period last year.
Despite strong transaction volume, Kerrigan points to a persistent tension in the broader market. The U.S. SAAR remains above 16 million units and inventory levels are relatively stable, but the average selling prices now exceed $50,000, pricing out a growing segment of buyers. He also cited a recent Wall Street Journal report estimating that roughly one million consumers who would otherwise buy new this year are simply priced out. Many are choosing instead to hold onto existing vehicles, which Kerrigan notes is driving service retention.
Additionally, Kerrigan notes that public dealer groups drove much of the first-quarter volume, deploying roughly $800 million in capital on acquisitions. That figure represents roughly four times what publics spent in Q1 2025.
Among the recent headlines circulating, AutoNation acquired a high-volume Toyota store in Newnan, Georgia, and Penske paid $670 million for two Lexus stores in Orlando, Florida, which Kerrigan describes as an all-time record for a two-store transaction.
"The buy-sell market is hitting on all cylinders." - Ryan Kerrigan, Kerrigan Advisors
Kerrigan warns that long-term valuation modeling can no longer rely on historical metrics alone. He referenced an AlixPartners report that ranked automotive as the most disrupted industry across all sectors and noted that Chinese OEM expansion, tariffs, oil prices and geopolitical risk are reshaping how Kerrigan Advisors evaluates franchise value going forward.
Notably, buyers are now factoring AI-driven margin improvements into their underwriting, Kerrigan said, which is lifting valuations for growth-oriented operators. He points to Group 1 Automotive’s recent announcement of a 700-person headcount reduction tied to automation, expected to generate $50 million in incremental annual profit, as a leading example of how AI is reshaping dealership economics.
“We’re not the only industry that’s reacting to AI, but we remain a very kind of paper-incentive, process-driven, people-intensive model.” - Ryan Kerrigan, Kerrigan Advisors
He flags Carvana’s move into franchise retail as one of the most closely watched developments in the market. The company acquired several Stellantis stores and grew one small Arizona location into the highest-volume Stellantis store in the country, operating without traditional management layers and leaning heavily on technology.
Additionally, he notes that access to OEM inventory and franchise approval will determine how far Carvana can extend its business beyond Stellantis. Although the industry is absorbing lessons from outside entrants like Carvana and CarMax, legacy pricing and customer experience structures have been slow to change, contends Kerrigan, but he alludes that external pressure is forcing greater openness.
Kerrigan Advisors increased the lower end of Kia’s blue sky multiple in its Q1 Blue Sky Report, citing robust dealer partnerships and ongoing acquisition interest. The firm also reduced Audi’s multiple, citing rising inventory levels, squeezed margins, heightened domestic competition, and tariff risks associated with its German manufacturing base. Additionally, Nissan exited negative watch after posting over 9% U.S. sales growth in Q1 year-over-year, the largest among major brands. Kerrigan believes Nissan has reached a bottom and remains a leading player in the under-$40,000 segment.
Nevertheless, Kerrigan said his firm’s pipeline is as full as it has ever been and projected a record year for Kerrigan Advisors by a wide margin, contingent on macroeconomic stability.
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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