Auto Dealership Buy/Sell Market Hits Record High in Q1 2026, Driven…

Event summary

478 dealership transactions completed in the trailing twelve months through March 2026, a 21% increase year-over-year and 114% above the pre-pandemic five-year average.
Multi-dealership transactions rose 36% year-over-year to 108 on a trailing twelve-month basis.
The Kerrigan Blue Sky Index reached 178 in Q1 2026, 78% above 2019 levels, with Toyota and Lexus achieving record blue sky values.
Average dealership earnings fell 15% to 20% year-over-year, bringing the average public dealership’s trailing twelve-month earnings to $3.9 million.
Public dealer groups allocated an estimated $790 million to US dealership acquisitions in Q1 2026, driving twelve-month spending above $5 billion.

The big picture

The auto dealership buy/sell market continues to experience record-setting activity, driven by a resurgence in multi-dealership transactions and rising valuations for top brands like Toyota and Lexus. Despite softer earnings, buyers remain confident in the structural strengths of auto retail, including higher new vehicle gross margins and a resilient US economy. The market is increasingly focused on high-demand franchises in major growth metros, with public dealer groups allocating significant capital to acquisitions. The composition of the industry’s largest dealership groups is evolving, with more outside capital entering the market and leading groups concentrating ownership into higher-volume dealerships.

What we're watching

AI Integration: How AI-driven operational improvements will affect future earnings projections and acquisition valuations.
OEM Facility Requirements: Whether the increasing demand for new OEM image facilities will prompt more divestitures and capital reallocation.
Industry Concentration: The pace at which leading dealership groups will consolidate ownership into higher-volume dealerships across fewer rooftops.