Sales hit new heights: Dealership buy-sell activity climbed 21% in Q1 2026, totaling 478 deals in the past year — more than double pre-2020 norms.
Private buyers dominate: Independent operators drove almost all transactions, prioritizing long-term growth despite short-term earnings declines.
Top brands command premiums: Well-performing franchises in affluent areas fetched record prices, with luxury names drawing especially strong buyer interest.
Independent dealership groups were responsible for nearly 96% of U.S. dealership transactions in early 2026, reflecting strong interest in expansion from entrepreneurial owners. Many pursued multiple stores within key regions to strengthen their market position, while public groups focused on select high-value purchases that influence market pricing.
Franchises tied to strong consumer demand and brand performance are attracting elevated prices in the current market. Luxury and high-margin brands in prime locations have been especially sought after, with affluent-area dealerships commanding notable premiums due to their profitability potential.
Key Factors Influencing Dealership Valuations
Average dealer earnings fell 15–20% year-over-year in early 2026, influenced by factors such as prior-year sales shifts related to tariffs and harsh winter weather slowing showroom traffic. Despite these pressures, profits remain well above pre-pandemic levels, and buyers are prioritizing long-term fundamentals over short-term fluctuations.
Service and parts operations continue to generate stable, recurring income that cushions dealerships from volatility in new and used car sales. Finance and Insurance products are also delivering strong returns, making dealerships with robust aftersales departments particularly attractive to acquirers.
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 440 franchises 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 2025 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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