U.S. buy-sell market remains strong as dealers adapt to economic headwinds – Ryan Kerrigan | Kerrigan Advisors

Despite market uncertainty, rising tariffs, and wavering EV demand, the retail automotive buy-sell market remains resilient in 2025. On today’s episode of CBT Now, Ryan Kerrigan, Managing Director at Kerrigan Advisors, joins us to share exclusive insights on deal flow, investor sentiment, consumer behavior, and how regulatory shifts could impact the industry.  

“2025 is tracking ahead of 2024 in terms of total transaction activity,” Kerrigan said, pointing to the continued demand from dealers seeking to scale operations.

“I think we’re going to finish this year with over 450 transactions.” - Ryan Kerrigan

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While the pace of platform-level acquisitions has slowed due to the high cost of capital, smaller regional and local deals have driven much of the activity. According to Kerrigan, these transactions now represent the “meat and potatoes” of today’s buy-sell environment. Publicly traded groups remain acquisitive but are proceeding more selectively.

Kerrigan pointed out that consumers likely rushed to buy new vehicles in the first half of 2025 to avoid higher prices from tariffs on imported cars and parts, suggesting that the recent increase in sales may be temporary. The sales rate may soften in the second half of the year, especially if affordability continues to deteriorate.

In the electric vehicle market, Kerrigan said buyer interest has cooled significantly in the U.S., with hybrids regaining popularity. Internationally, Chinese manufacturers are leading EV adoption, compared to the pullback among U.S. consumers. He notes that the global EV sales are “just shy of 20% of global auto sales and continues to grow.”

Further, Kerrigan addresses growing legal and regulatory challenges, including pressures on state franchise laws. For instance, the Alliance for Automotive Innovation recently called on the Department of Justice (DOJ) to examine state protections that some argue restrict automakers’ flexibility.  While legislative changes remain uncertain, Kerrigan said manufacturers are increasingly questioning how to best evolve within the current structure.

However, despite macroeconomic headwinds, Kerrigan said the franchise model remains “durable and attractive” to investors, especially given its consistent cash flow and operational resilience.

Nonetheless, Kerrigan Advisors expects continued strength in dealership M&A through the rest of 2025, with interest likely to rise further if the Federal Reserve lowers rates later this year.