The U.S. dealership buy-sell market saw a slowdown in the first half of 2025, with transaction volume dropping 39 percent compared to the same period in 2024, according to The Haig Report Q2 2025. Despite the decline in dealership sales activity, retailers demonstrated remarkable resilience with strong profitability gains, highlighting the industry’s ability to continue navigating challenging economic conditions.
Transaction Volume Falls to Five-Year Low
Only 192 U.S. dealerships were sold during the first half of 2025, down from 317 stores in the same period last year. This represents the slowest start to dealership acquisition activity since 2020, when the COVID-19 pandemic completely disrupted the automotive retail landscape.
Private buyers dominated the market, acquiring 179 dealerships compared to just 13 purchased by publicly traded groups. This marks a stark contrast to previous years when public companies were more aggressive acquirers. The six publicly traded dealership groups spent a combined $1.0 billion on U.S. auto acquisitions during the first half of 2025, marking a 26 percent decline year over year.
However, spending is expected to increase in the third quarter following Asbury Automotive Group’s $1.3 billion acquisition of the Herb Chambers dealership group in July, one of the largest transactions in recent industry history.
The Q2 slowdown appears driven by multiple factors, including election uncertainty in late 2024 and the implementation of new tariff policies in the second quarter. According to the report there has not been too drastic a decline in confidence, just that many buyers are watching and waiting before actually closing deals.
Tariff Impact
The implementation of tariffs on imported vehicles and parts was the dominate disruptor for dealership operators in Q2. President Trump’s Liberation Day announcement on April 2 triggered a rush of consumer purchases before potential price increases, providing a temporary boost to dealership sales volumes and margins. However, the long-term implications remain uncertain.
“Now I know tariffs continue to be top of mind,” said Michael Manley, CEO, AutoNation in the report. “MSRP and invoice prices have been stable… We believe the objective of maintaining market share… will weigh equally with the desire to offset any new tariffs.
Global automakers have already paid $11.8 billion in higher import duties from March through June, with manufacturers largely absorbing these costs rather than passing them to consumers or dealers. This strategy aims to preserve market share and customer satisfaction but puts significant pressure on automaker profitability. It’s unclear how much longer automakers will be willing to eat these costs.
Dealership Profitability Still High
Despite a slow buy-sell market, dealership profitability showed remarkable strength in the second quarter. The average publicly owned auto dealership generated $1.2 million in pre-tax profit during Q2 2025, representing a 25.8 percent increase over the same period in 2024.
Public retailers reported that profits per store rose 20 percent compared to Q2 2024, with strength across all departments including new vehicle sales, used cars and finance and insurance. The gains might not all be as substantial as they first appear though. For some dealers the comparison against 2024’s second quarter is impacted by the CDK Global cyberattack that disrupted dealership operations nationwide. For others, it’s an increase that benefitted from the tariff-induced demand in April and May and may not carry over to Q3.
Outside of vehicle sales, fixed operations emerged as a standout performer, with same-store gross profit increasing 8.4 percent year over year. This growth continuously provided dealers with a reliable source of earnings as variable margins continue to flucutate.
Blue Sky Values Back on the Rise
Average blue sky values for publicly owned dealerships reached $21.8 million in Q2 2025, up 4.3 percent from 2024’s average of $20.9 million. This increase broke a streak of twelve consecutive quarterly declines. The report noted that blue sky values remain roughly double their 2015-2019 average, reflecting the fundamental strength of the franchised dealer model.
Haig Partners made several adjustments to franchise valuation multiples during the quarter, including a 0.25x increase for Toyota’s low-end multiple range and a significant 1.50x reduction for Audi across both high and low ranges, reflecting the German luxury brand’s struggles with declining sales and import tariffs.
Market Outlook Remains Positive
Despite current challenges, there is a positive outlook for the remainder of 2025. There has been time to adjust to tariffs and sales have not dropped as much as many originally feared. New vehicle sales averaged a 16.1 million units seasonally adjusted annual rate in Q2, with forecasts calling for 15.7 million units for the full year.
“We’re cautiously optimistic about the back half of 2025,” said Bryan DeBoer, CEO of Lithia Motors in the report. “Inventory is normalizing, and consumer demand is stabilizing, though at lower price points.”
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