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Welcome to The Breakdown, an analysis of auto retail’s top trends, moves, and insights—in under 5 minutes.
The Presidio Group, in its third-quarter M&A report, estimates that about 290 transactions involving 395 dealerships were finalized through the first nine months of the year.
The number of dealerships sold was up 8% from a year earlier.
Deals are getting bigger, too, and Presidio expects that momentum to carry into 2027.
Also: In Presidio’s Midyear 2026 Dealer Direction Survey, 18% of dealers said they want to sell in the next year, up from 11% at year-end 2025.
Sellers still hold the leverage, but buyers are getting pickier about what they’ll pay for.
So, here’s what’s deciding which deals get done, and at what price.
Brand and location are splitting buy-sell values.
Erin Kerrigan, managing director of Kerrigan Advisors, said valuations are diverging by franchise and market.
“It’s definitely a K-shaped buy-sell market,” Kerrigan told CDG News.
Erin Kerrigan
Kerrigan Advisors
Top franchises in top markets receive premium valuations, while weaker franchises in markets that aren’t growing are, in some cases, seeing values go down, Kerrigan said.
Brand notes from Kerrigan:
Toyota and Lexus stores are posting growing profits and sales and selling at record prices.
Stellantis and Nissan sales are far below their peak, and those franchises are trading at values “lower than we’ve seen in many, many years, maybe even a decade.”
Scarcity also drives up prices.
Top luxury franchises are still single-point in many markets, Kerrigan said, so when that store comes up for sale, the dealer consolidating that market will pay a big premium to own it.
Presidio’s numbers show that demand: Lexus, Mercedes-Benz, BMW, Porsche, Land Rover and Audi made up 7.9% of franchises trading hands through nine months, more than double their 3.9% share over the same period in 2023.
Domestics are splitting, too: Derek Garber, a managing director at Haig Partners, told CDG News that large Ford and General Motors stores in major metros still command strong valuations.
But, buyer demand has “cooled considerably” for many CDJR and rural domestic stores, he said, plus their values have fallen back to pre-COVID levels or lower.
And, buyers are becoming more choosy in general.
“Brand and location matter more than ever,” Garber said. “We’re seeing record valuations and declining valuations at the exact same time, creating a widening gap between the haves and have-nots.”
Derek Garber
Haig Partners
Presidio sees the same split. The sexiest brands attract intense buyer lust “and strong pricing, while others face more selective appetites,” the report said.
Its intel shows buyers are:
Increasingly interested in Lexus, Mercedes-Benz, Honda and Audi
Noting some headwinds for the GM brands
Reporting more challenges for Hyundai and Volkswagen
Even the most desirable brands have limits, though, and Presidio believes Toyota valuations have peaked.
George Karolis, president of The Presidio Group, said in the report that a strong brand doesn’t mean its value will rise forever.
“When mass-market brand dealerships already are trading at luxury-brand multiples, buyers should consider how much of the brand’s strength is already reflected in the price,” Karolis said.
George Karolis
The Presidio Group
On the flip side: Matt Willis, a managing partner at Performance Brokerage Services, told CDG News that owners of smaller rural domestic stores, many without a succession plan, are contemplating their exits.
“They’re getting to a point where it’s not very fun to be a car dealer anymore,” Willis said.
Matt Willis
Performance Brokerage Services
And he said that goes for sellers across the board.
“It’s becoming more challenging right now in all areas of the automobile business and for those that don’t have a succession plan, now is a really good time to sell,” Willis said.
The takeaway: There are buyers for nearly every deal, Presidio says, but brand and market are setting the price.
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Automakers are approving buyers based on how they sell today.
Willis said manufacturers are weighing a buyer’s sales effectiveness across all of its stores more than customer satisfaction (CSI) scores, which used to be the top priority.
Even one weak store can lead to a denial, he added, though a buyer acquiring another store of the same brand usually can negotiate.
(The buyer may agree to a sales improvement plan or an image upgrade, for instance.)
Still: Willis put the odds at “very, very low” for a buyer adding a different brand while falling short at its current stores.
Not to mention, not all OEMs are generous with their green lights.
“I’d say the biggest obstacle right now has been Stellantis approvability,” Willis said. “We just had a transaction… a two-rooftop acquisition, and the buyer was approved by [one OEM] and declined by Stellantis, which really, really kind of messed up the deal.”
(Another buyer closed it.)
Speaking of getting OK’d: Presidio’s report says record transaction activity is straining manufacturer resources and slowing some deals.
Randy Hoffman, COO of Ed Morse Automotive Group, said automakers used to have 60 days to decide after getting paperwork, since most states have laws requiring a decision within that window.
“But now it’s almost like nobody’s even paying attention to a clock,” Hoffman said.
Randy Hoffman
Ed Morse
Automotive Group
Waiting for the decision hasn’t made the Florida-based group ditch a deal yet, though “the approval process has made me lose some hair,” Hoffman joked.
Buyers are pricing stores on recent performance and reputation.
Kerrigan said buyers are “being more careful on pricing because it does appear that for certain franchises, earnings are on the decline.”
And they’re zeroing in on the here and now, Willis said.
Then vs. now:
Buyers used to weigh a three- to five-year snapshot of a store’s performance.
Now they’re focusing on the last six to 12 months, since the COVID years skew the picture.
More buyers are looking at it, saying, “I’m not so worried about what happened in the past. I’m way more concerned with what’s going on currently,” Willis said.
Real estate is now up for negotiation, too.
With appraisals coming in high, buyers are starting to push back on property prices, where blue sky (the intangible value of a dealership, including goodwill) used to be the main point of negotiation, Willis said.
Beyond the numbers: A store’s reputation is part of the price, too, Presidio says.
A strong one can raise its value, while a poor one can mean smaller buyer pools, longer timelines and more pressure on price.
Recent FTC actions against dealers show how quickly reputational missteps can become financial liabilities, the report notes.
Presidio’s checklist includes:
Online reviews and complaint patterns
Any regulatory or legal history around sales or F&I
Store culture
Ed Morse Automotive builds a culture check into the deal, with a clause in its letter of intent (LOI) and asset purchase agreement (APA) that allows it to meet with management during due diligence.
Sellers often fight it, Hoffman said, “because they like to keep it confidential right up to the last minute.”
The group still pushes to talk to more people, though, because “generally, if the employees are happy, they’re treating the customers well,” Hoffman said.
Checking the books: They always do a quality-of-earnings review, which verifies the seller’s financials.
Depending on the deal’s size, EMAG’s internal accounting team may handle it.
On bigger deals, it’s outsourced to a CPA firm.
“During the quality of earnings, a lot of things will show,” Hoffman said.
Bottom line: Willis expects the new year to be even busier, and Presidio is expecting a wave of megadeal closings.
The catches, per Willis and Kerrigan: Buyers will have to prove they’re selling well, and higher interest rates could dampen valuations.
