Dealerships have demonstrated remarkable resilience and strength throughout 2025, and it has consistently paid off with high valuations despite a rocky economic climate. In the third quarter, dealership profits were up, valuations were near record levels and even buy-sell activity increased. According to the newly released Q3 2025 Haig Report®, the industry has successfully fought through the uncertainties of the first half of the year, setting a positive tone for 2026 as both buyers and sellers return to the transaction table.
An estimated 149 dealerships were sold in the quarter, a figure that matches the activity seen in Q3 2024 and marks a significant recovery from the first half of the year. With this momentum, Haig Partners forecasts that approximately 450 rooftops will be sold by the end of the year, with the potential for even higher volumes in 2026.
“Most dealers we speak with are optimistic about the future,” said Alan Haig, President and Founder of Haig Partners. “Despite tariffs and struggles at some brands, average profits remain more than twice pre-pandemic levels, and both buyers and sellers are leaning in again. Confidence is back in the market and sellers can still receive near peak values for their dealerships.”
It is Profitable to Own a Dealership
A primary driver of this confidence is the sustained, significant profitability of dealerships. The average publicly traded dealership saw its pre-tax profits increase by 13 percent in Q3 2025 compared to the same period in 2024.
This financial strength was powered by several key areas. Fixed operations continued its impressive growth, with revenues up 8.3 percent over Q3 2024. This boom in service and parts, coupled with continued high gross profits from F&I departments, helped offset a slight dip in gross profits per new and used vehicle sold. Overall, dealership earnings remain at approximately twice their pre-pandemic levels.
Valuations are Increasing
This sustained profitability has a direct and positive impact on dealership valuations. The average blue sky value for a publicly owned dealership was estimated at $22.4 million in Q3 2025, a notable 7.3 percent increase since just the end of 2024. This rise is attributed to the combination of higher earnings and strong, consistent demand from a diverse pool of buyers, which includes both large public groups and private capital.
“Buyers appear to have overcome their hesitations earlier in the year, worried about the results of the election and tariffs,” said Haig. “Sellers are again finding strong values, and we’re seeing both strategic divestitures and full exits as families look to capture near-peak valuations.”
Some at-large franchise valuations showed some movement, reflecting brand-specific challenges. Lexus continues to be a top-tier brand for investors, with its blue sky multiple range increasing from 8.0x-10.0x to a strong 9.0x-10.0x. This indicates high confidence in the brand’s future earnings potential. In contrast, Porsche’s multiple range widened from 9.0x-10.0x to 8.0x-10.0x, as dealers face issues related to product strategy, margin pressures, and facility investment requirements.
Who is Buying Dealerships?
While premium brands still command multi-million-dollar blue sky payments, a market has emerged for “value-buyers.” These investors are purchasing franchises like CDJR and Nissan from dealer groups frustrated with their performance. These stores are trading at lower multiples, reflecting their reduced profitability but offering an attractive entry point for operators confident they can turn them around.
Looking at specific brands, the report highlights Ford as a point of interest. While the brand is navigating short-term pressures from quality issues and past EV strategy missteps, its underlying fundamentals remain strong. The F-Series truck lineup and the growing Ford Pro commercial division continue to generate profit and service volume. Buyers are increasingly seeing current Ford valuations as an attractive entry point, especially with the next generation of high-volume trucks expected in 2027 and 2028.’
What does 2026 Hold for the Auto Industry?
The broader economic environment, while still a little rocky, appears to be supporting the auto retail industry. Dealers are increasingly comfortable that the worst is behind them and that the new year will bring more stability and success.
With a strong pipeline of sellers emerging in the fourth quarter, Haig Partners anticipates a higher supply of dealerships coming to market in the first half of 2026. This, combined with persistent buyer demand, points to a healthy and active M&A market ahead.
“We’re now in a rational market, one where both buyers and sellers can win,” said Haig. “The next wave of deals will be driven by strategy, not speculation.”
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