Auto Retail M&A: 2025 Review and 2026 Outlook
Author: Brian Alwine | Director | CPA, ASA
Published: March 31, 2026
Year-end buy-sell advisory reports for automobile dealerships by Haig, Kerrigan, and Presidio offer a consistent message: The dealership M&A market remains strong, but the underlying dynamics are becoming more complex.
Where the Industry Perspective Is Aligned
1. M&A activity remains elevated
All three reports point to sustained transaction volume and strong buyer interest.
• Haig reports more than 600 dealerships sold in 2025
• Kerrigan highlights a record 458 transactions involving 688 franchises
• Presidio notes a robust pipeline and continued momentum into 2026
The conclusion is straightforward. The market remains active and competitive for quality assets.
2. Profitability has normalized but remains structurally strong
Earnings have shifted from pandemic-era peaks, but profitability remains well above historical norms.
• Approximately $4 million average pre-tax profit per dealership
• Consistent performance across public and large private operators
All three reports emphasize a shift in earnings composition. Front-end margins are moderating, while fixed operations and F&I continue to provide stability. The implication is that dealership earnings are becoming more predictable and more durable.
3. Consolidation continues to accelerate
Scale remains a defining theme.
• Larger groups continue to expand through acquisitions
• Smaller operators face increasing competitive and capital constraints
• Significant capital remains available to fund growth
Kerrigan notes that more than 3,500 franchises have transacted over the past five years, nearly double the pace of the prior cycle. This suggests a clear trend that consolidation is continuing, driven by scale, capital availability, and operational efficiency.
4. Valuation dispersion is increasing
All three reports highlight a widening gap between top-performing and underperforming assets.
Strong demand persists for:
• Luxury and leading import brands
• High-volume, high-efficiency operations
• Dealerships with strong fixed operations
At the same time, weaker brands and lower-volume stores are seeing reduced buyer interest. Simply put, valuation outcomes are becoming increasingly contingent on asset quality and operational performance.
Where Perspectives Diverge
1. The strength of the market
Each report interprets current conditions through a slightly different lens.
• Haig presents a measured view, indicating the market is healthy but clearly transitioning to a more normalized environment where execution will be critical
• Kerrigan takes a more optimistic stance, emphasizing record activity, strong valuations, and continued momentum supported by capital and consolidation trends
• Presidio offers a balanced perspective, acknowledging some variability in 2025 activity while pointing to strong forward demand and an improving outlook
These differences are less about disagreement and more about emphasis.
2. The role of disruption and technology
The reports diverge more meaningfully in how they frame industry disruption.
• Kerrigan highlights disruption as a central theme, including affordability pressures, new competitors, and the impact of AI
• Presidio views technology, particularly AI, as an enabler of productivity and scalability for well-capitalized operators
• Haig focuses more on operational fundamentals, including cost control, fixed operations, and execution discipline
In other words, disruption appears to be both a risk and an opportunity, depending largely on positioning and scale.
3. The outlook for weaker assets
There is broad agreement that not all dealerships will perform equally, but the degree of downside varies by perspective.
• Haig signals potential value pressure for low-volume and underperforming stores
• Kerrigan frames the market as increasingly bifurcated, with a clear divide between high- and low-performing assets
• Presidio emphasizes active portfolio management, with operators reallocating capital toward stronger opportunities
Despite different framing, the conclusion indicates a similar sentiment: Buyers are becoming more selective.
Overall Perspective
The dealership M&A market remains active, but the drivers of value are shifting. As pandemic-era profitability fades, performance differences between operators are becoming more visible. Scale, operational efficiency, and brand mix are playing a larger role in determining outcomes. For operators and investors, the key question is no longer whether the market is attractive. It’s how well-positioned a given business is within a more selective and competitive landscape.
