Record-Breaking Activity Marks the Dealership Buy/Sell Market
The dealership buy/sell market has seen unprecedented levels of activity in 2025, with the Blue Sky Report® by Kerrigan Advisors reporting a staggering 458 completed transactions. This surge translates to the sale of 688 franchises, representing a 5% increase from the previous year and demonstrating a strong appetite for acquisition and consolidation within the industry. While 2025 posed challenges such as tariffs and changing EV tax credits, many dealership owners navigated these issues successfully, leading to a record-setting year.
Shifting Strategies in Franchise Acquisitions
Interestingly, though the overall number of transactions was high, the nature of acquisitions is evolving. The average number of franchises sold per transaction fell to 1.5—the lowest on record—indicating a shift from broad acquisition strategies to more strategic and targeted purchases. Consolidators have prioritized geographic density in their expansions, with 60% of acquired franchises located within markets that buyers already operate. This reflects a calculated move towards maximizing operational efficiencies.
Strong Financial Performance Fuels Buyer Confidence
A cornerstone of the buy/sell activity is the stable financial health of dealerships. Despite slight softening from pandemic-era margins, average pre-tax earnings for public dealerships reached approximately $4.1 million per location in 2025, up 87% compared to pre-pandemic averages. Buyers are viewing this profitability as a sustainable benchmark rather than a fleeting high, bolstered by disciplined inventory levels from OEMs and robust growth in fixed operations.
New Vehicle Sales and Their Role in Market Dynamics
The recovery in new vehicle sales is also a significant contributor to the buoyant market, with retail light vehicle sales hitting 14.5 million units in 2025—surpassing 2019 levels. This rebound has translated into total industry revenue reaching an all-time high, with new vehicle gross profit per unit maintaining a remarkable average of $3,383, 63% higher than 2019 figures. The strong correlation between vehicle sales and dealership performance reinforces the optimistic outlook for potential buyers in the market.
The Road Ahead: Implications for Dealership Owners
As we observe these record-setting trends in the dealership buy/sell market, it's crucial for dealership owners and GMs to stay informed and agile. Understanding the shifting landscape and financial health of the industry will be key to making astute decisions around acquisitions and operational efficiency. Keeping an eye on the broader market trends, including vehicle sales momentum and financial metrics, will empower owners to navigate future challenges while seizing opportunities for growth.
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