On the Dash:
- Buy-sell activity rose 21% year-over-year in Q1, reaching a record 478 transactions on a trailing 12-month basis.
- Franchise valuations remain near historic highs, with the Kerrigan Blue Sky Index climbing to 178.
- OEM executives expect consolidation to continue, while buyers increasingly view AI as a future profit driver.
The dealership buy-sell market accelerated sharply in the first quarter of 2026, extending an unprecedented run of consolidation across automotive retail.
According to Kerrigan Advisors’ First Quarter 2026 Blue Sky Report, dealership transactions increased 21% year over year, while completed buy-sell transactions reached a record 478 on a trailing 12-month basis. That figure stands 114% above pre-pandemic averages and marks the sixth consecutive year of elevated consolidation activity.
What’s driving the surge?
A major catalyst behind the surge was a rebound in multi-dealership transactions. Kerrigan reported that multi-store acquisitions rose 36% year over year, reaching 108 transactions over the trailing 12 months. The firm’s latest OEM survey also points to continued momentum, with 35% of OEM executives expecting buy/sell activity to increase over the next year and 53% anticipating current levels to remain steady.
Notably, high franchise valuations continue to attract sellers, with the Kerrigan Blue Sky Index rising to 178 in the first quarter, a 78% increase from 2019 levels. Demand remains strongest for high-performing franchises such as Toyota, Lexus, BMW and Porsche, where valuation multiples continue to reach record territory.
Industry uncertainty grows
Simultaneously, a growing number of dealers are reassessing long-term succession plans amid rising geopolitical uncertainty, affordability concerns, regulatory scrutiny and the potential impact of emerging competitors. Dealer confidence declined 3% during the quarter, reflecting broader concerns about tariffs, economic volatility and consumer spending trends.
Despite those headwinds, buyers remain optimistic, as public dealership groups continue to pursue acquisitions aggressively, paying nearly $200 million per dealership on average during the quarter. Many large retailers also see AI as a key growth opportunity, with 59% of OEM executives surveyed expecting AI to improve dealership profitability.
As valuations remain elevated and buyers continue to pursue scale, Kerrigan Advisors expects consolidation activity to remain robust throughout 2026.
