Auto Dealership Buy/Sell Market Hits Record High Despite Earnings Decline
Event summary
- 224 dealership transactions completed in the first half of 2026, up 2% from 2025.
- Record 462 buy/sell transactions in the trailing twelve months, 107% above pre-pandemic average.
- Hennessy Automobile Companies sold to Group 1 Automotive for $1.3 billion, highest blue sky value ever paid per dealership.
- Public dealer groups spent $2.6 billion on US dealership acquisitions in the first half of 2026.
- Average dealership earnings declined 10-20% year-over-year, but Kerrigan Blue Sky Index held steady at 178.
The big picture
The auto dealership buy/sell market is experiencing record activity driven by a focus on long-term growth prospects despite short-term earnings declines. The largest dealership groups are scaling up through premium acquisitions, underpinned by the belief that technology and AI will enhance profitability. This consolidation trend is expected to continue through 2026 and into 2027, with Wall Street rewarding groups that combine scale with technological advancements.
What we're watching
- Scale and Technology
- How the combination of scale and technology will continue to drive dealership valuations and profitability.
- Geographic Premiums
- Whether valuation premiums in high-growth states will persist and impact slower-growth markets.
- Franchise Performance
- The pace at which high-performing franchises like Kia and Honda will see increased buyer demand and valuation multiples.