Automotive dealerships will keep selling in 2025 at a brisk pace, experts say, though normalizing store profits may slow how fast those transactions close, as buyers more carefully consider what they’re willing to pay for acquisitions.
Top-performing stores, especially those in desirable markets, will keep fetching big bucks. And while dealership sale transaction numbers may not rise to the peak levels coming out of the COVID-19 pandemic, numbers are expected to remain elevated.
Donald Trump’s presidency and the belief his administration will stay friendly to automotive retailers, combined with some cheaper dealership pricing and older dealers looking to sell, will contribute to the bustling buy-sell market this year, according to dealers and the professionals they work with.
2025 is off to a fast start, including a pending blockbuster: Asbury Automotive Group said it will pay $1.34 billion to acquire New England’s Herb Chambers Cos., one of the largest private auto retailers in the country with 33 stores. That deal is expected to close in the second quarter.
Some private auto retailers also predict a busy buy-sell year.
“I’m definitely still getting as many offerings to look at as I’ve gotten the past two years,” Randy Hoffman, COO of Ed Morse Automotive Group, told Automotive News. The Delray Beach, Fla., group owns about 50 franchised dealerships.
In January, Automotive News asked dealership executives whether they plan to buy or sell stores in 2025.
More than half of the 114 respondents who answered the question in Automotive News’ 2025 Dealer Outlook Survey, or 56 percent, said they did not plan to buy or sell any dealerships this year.
Nineteen percent said they planned to buy dealerships, while 4.4 percent said they planned to sell, 4.4 percent answered they planned to both buy and sell, and 16 percent were unsure.
Automotive News continues to track numerous 2024 deals. It has confirmed at least 349 transactions, involving the sale of at least 500 dealerships. Automotive News counted 707 dealerships trading hands in 382 transactions in 2021, a peak.
Erin Kerrigan, managing partner for sell-side firm Kerrigan Advisors in Incline Village, Nev., told Automotive News that her firm had its busiest year in 2024 and expects it to continue.
“We have a very strong pipeline for 2025, so we expect 2025 will replicate 2024,” Kerrigan said.
Kerrigan expects buyers will feel more confident in projecting future dealership earnings.
“What I see in 2025, is that now we’re getting back to normalized earnings, and buyers are very excited about investing in profitable businesses,” Kerrigan said.
And while weaker-performing stores will still sell, Kerrigan said, they just won’t sell at premium prices.
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Kerrigan Advisors is the leading exclusive sell-side advisor and thought partner to auto dealers nationwide. Since its founding in 2014, the firm has led the industry with the sale of over 280 auto dealerships representing $9 billion in client proceeds, including the third largest transaction in auto retail history – the sale of Jim Koons Automotive Companies to Asbury Automotive Group. Kerrigan Advisors advises the industry’s leading dealership groups, enhancing value through the lifecycle of growing, operating and, when the time is right, selling their businesses. Led by a team of veteran industry experts with backgrounds in investment banking, private equity, consulting, accounting, finance and real estate, we not take listings nor do we employ a brokerage model; rather we develop a customized sales approach for each client to achieve their personal and financial goals. In addition to the firm’s sell-side advisory services, Kerrigan Advisors also provides a suite of automobile dealership consulting and investor services including growth strategy, market valuation assessments, capital allocation, transactional due diligence, open point proposals, operational improvement and real estate due diligence.
Kerrigan Advisors monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report®, the industry authority on dealership buy/sell market trends and valuations and includes Kerrigan Advisors’ signature blue sky charts, multiples and analysis for each franchise in the luxury and non-luxury segments. To download a preview of the report, click here. The firm also releases The Kerrigan Index™ comprised of the seven publicly traded auto retail companies with operations focused on the US market. The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here. To read the 2024 Kerrigan Dealer Survey, click here. To read the 2024 Kerrigan OEM Survey, click here. Kerrigan Advisors also is the co-author of NADA’s Guide to Buying and Selling a Dealership.
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