The auto dealership buy/sell market set another record in the first quarter of 2026, with transactions rising 21% compared to the first quarter of 2025, according to the just-released First Quarter 2026 Blue Sky Report by Kerrigan Advisors. 478 transactions were completed through March 2026 on a trailing twelve-month basis, the highest level ever recorded in a twelve-month period, and 114% above the pre-pandemic five-year average. Even as average dealership earnings softened year-over-year, a resurgence in multi-dealership transactions and rising franchise valuations for the top brands bolstered the buy/sell market.
“As auto retail enters its sixth year of record-setting buy/sell activity, the accelerating pace of consolidation has become an industry staple,” said Erin Kerrigan, founder and managing director of Kerrigan Advisors.
“This quarter’s impressive performance illustrates a market operating on long-term conviction, rather than short-term earnings. Even with the quarter’s softer profitability performance, dealers and buyers alike see auto retail’s fundamentals as durable, and the most desirable franchises are commanding record prices. That is bringing more owners of these sought-after franchises to market, and we expect that momentum to define 2026’s dealership buy/sell market.”
One of the drivers of the rise in transaction activity in 2026 is the pickup in multi-dealership transactions, up 36% year-over-year, reaching 108 transactions on a trailing twelve-month basis. In addition, the Kerrigan Blue Sky Index rose to 178 in the first quarter of 2026, 78% above 2019 levels, with certain brands, including Toyota and Lexus, achieving record blue sky values during the quarter. These historically strong valuations for the highest-demand franchises continue to bring more sellers to market and significantly increased their share of buy/sell activity in 2026 compared to last year.
The US public dealer groups’ average acquisition purchase price-per-dealership rose to a record of nearly $200 million in the quarter, up over 250% from 2025, reflecting the premium buyers will pay for the highest-demand franchises. The quarter’s spending included Penske’s estimated $670 million purchase of Lexus of Orlando and Lexus of Winter Park in Central Florida, the most ever paid for two dealerships in the US. The publics remain focused on the top franchises in major growth metros, where these finite, high-volume assets rarely come to market.
First quarter acquisition spending by the publics rose to an estimated $790 million, up from just $154 million a year earlier, bringing their trailing-twelve-month spending above $5 billion, the second highest level on record. Acquisition activity remained concentrated in the highest-demand franchises, with luxury franchises representing 64% of acquisitions since January 2025, led by Lexus, Mercedes-Benz and Toyota.
In the First Quarter 2026 Blue Sky Report, Kerrigan Advisors identified three important trends expected to meaningfully impact the auto retail market in 2026 and beyond.
- Future cost savings from AI are enhancing pro forma earnings projections
- OEM image investments prompt capital allocation assessments and more divestitures
- The make-up of the leading dealership groups is evolving
Buyers increasingly expect artificial intelligence to improve dealership earnings, and some of the industry’s largest consolidators are beginning to project AI’s future cost savings and revenue enhancements into their pro formas for their own businesses and their acquisition opportunities. OEMs share a similar sentiment, as referenced in Kerrigan Advisors’ 2026 OEM Survey, where 59% of surveyed OEM executives expect AI to increase future dealership profitability.
