It’s a “K-shaped” dealership M&A market, as buyer demand drives up the price for the most sought-after franchises and some other brands struggle, according to buy-sell advisors
“The demand for Toyota franchises is quite frankly insatiable,” said Erin Kerrigan, founder and managing director of Kerrigan Advisors, in a July 14 webinar hosted by the American International Automobile Dealers Association.
Separately, George Karolis, president of the Presidio Group, described the current buy-sell market to WardsAuto as a “flight to quality” in a phone interview July 16. “There’s a lot more demand for those high-quality brands,” he said, citing a number of transactions for Mercedes-Benz franchises.
The Presidio Group and Kerrigan advisors both forecast a strong buy-sell market in 2026. “It could be a record year. If not a record, then in the Top 3,” Karolis said.
Presidio, with offices in the Denver and Atlanta metro areas, estimates there were around 215 buy-sell transactions in the first half of 2026 — a 23% increase vs. the first half of 2025. Those transactions involved about about 315 dealerships, versus 215 a year ago.
Sought-After
High-flying franchises for acquisitions also include BMW, Porsche and Lexus among luxury brands, and Honda and Toyota among volume imports, Kerrigan said.
In the AIADA webinar, Kerrigan said that in the first quarter of 2026, those five brands saw the biggest increase in their share as a percent of all buy-sells, versus their average share for all of 2025.
BMW’s share of buy-sells in the first quarter was up 228% versus its average for 2025; Porsche’s share was up 207%; Lexus, up 123%; Honda, up 89%; and Toyota, up 37%, Kerrigan Advisors said.
“The first quarter of 2026 saw a significant increase in buy/sell market share for several of the industry’s most coveted franchises, as record blue sky values for many of these franchises brought more sellers to market,” according to the Kerrigan Blue Sky Report for the first quarter of 2026, published June 9.
“Blue sky” refers to the portion of the price paid for a franchise in an acquisition, over and above the value of the physical assets.
Along with high franchise values, selling dealers are also facing new risks that may contribute to the decision to sell, Kerrigan said July 16 in a follow-up phone interview.
Those higher risks today include higher gas prices, vehicle affordability and the conflict in the Middle East, according to the Kerrigan Blue Sky Report.
Age-old issues
Karolis at the Presidio Group said that addition to today’s high franchise values for preferred brands, it’s also a truism that family-owned dealer groups who decide to sell commonly have succession issues. Incidentally, the Kerrigan Blue Sky Report also cites succession issues as a motivator.
“I think the story is, the average age of a dealer is over 70. Some lack succession plans, that’s still the No.1 driver for folks selling. I don’t think there’s a materially higher proportion selling because of valuations,” Karolis said.
In a dealer survey published June 25, Presidio said 18% of respondents said they were open to selling dealerships in the next year, up from 11% a year ago.
Karolis said dealers looking to shed underperforming brands probably contributed to the increase. In a Dealership M&A Market Update for the second quarter of 2026, the Presidio Group downgraded its valuation guidelines for Audi and said it’s keeping an eye on a recent rebound by Nissan franchises, compared with long-term, underperforming numbers.
“The market’s bifurcated now. We are seeing a lot more demand for the high-quality stuff, and there’s a lot less of it available,” Karolis said.
