U.S. Dealership Buy-Sell Activity Slows 39% – Profits Hold Strong
The buy-sell market for U.S. auto dealerships cooled significantly in the first half of 2025, with transaction volume falling nearly 40% compared to the same period last year. According to The Haig Report Q2 2025, just 192 dealerships changed hands in the first six months of the year — the lowest first-half total since 2020, when COVID-19 disrupted the industry.
Even as acquisition activity slowed, dealerships themselves remained highly profitable, underscoring the strength and resilience of the franchised dealer model in the face of tariffs, election uncertainty, and shifting market dynamics.
Buy-Sell Activity at Five-Year Low
From January through June, 192 U.S. dealerships were sold — down sharply from 317 in the same period of 2024. Most of those deals involved private buyers, who acquired 179 stores, while publicly traded groups purchased just 13.
That’s a noticeable departure from past years, when public groups were more aggressive acquirers. Collectively, the six public dealership groups spent $1.0 billion on acquisitions in the first half of 2025, a 26% decline from last year.
That figure is expected to rebound in Q3, thanks to Asbury Automotive Group’s $1.3 billion purchase of Herb Chambers Automotive Group in July, one of the largest transactions in recent industry history.
Industry analysts attribute the Q2 slowdown to a combination of political and economic uncertainty — from the 2024 election cycle to new tariff policies rolled out in the spring. According to the report, many potential buyers are in “wait-and-see” mode, monitoring conditions before moving forward on deals.
Tariffs Weigh on the Market
The introduction of tariffs on imported vehicles and parts has been the biggest disruptor of 2025 so far. In April, President Trump’s “Liberation Day” announcement sparked a rush of consumer purchases as buyers tried to get ahead of potential price increases. That short-term bump boosted Q2 volumes and margins, but the long-term impact remains unclear.
“Tariffs are still top of mind,” said AutoNation CEO Michael Manley in the report. “Manufacturers are working hard to maintain market share, which means balancing pricing pressures with the need to offset higher duties.”
Between March and June, global automakers paid $11.8 billion in additional import duties, most of which they absorbed themselves to avoid passing costs on to dealers or consumers. While that strategy has protected short-term demand, it’s creating financial strain for manufacturers — and raising questions about how long they can continue to carry the burden.
Profits Remain Resilient
Despite fewer acquisitions, dealership profitability reached new highs in Q2. The average publicly owned store generated $1.2 million in pre-tax profit, up 25.8% compared to last year.
Public groups reported per-store profit growth of 20%, with gains across new and used vehicle sales, finance and insurance, and aftersales. However, the comparisons are somewhat distorted: Q2 2024 results were impacted by the CDK Global cyberattack, which shut down systems nationwide, and Q2 2025 saw a short-term boost from tariff-driven buying activity in April and May.
Even so, fixed operations once again delivered dependable performance. Same-store gross profit from service and parts grew 8.4% year-over-year, reinforcing the role of aftersales as a stabilizing force when sales margins fluctuate.
Blue Sky Values Edge Higher
Valuations also showed signs of strength. Average blue sky values for publicly owned dealerships rose to $21.8 million in Q2 2025, up 4.3% from a year earlier. That marks the first quarterly increase in three years, breaking a streak of 12 consecutive declines.
The report noted that blue sky values remain about double their pre-pandemic average, reflecting continued confidence in the dealership model.
Haig Partners adjusted franchise multiples during the quarter, raising Toyota’s low-end range by 0.25x while cutting Audi’s range by 1.5x on both ends. The reduction reflects the German brand’s struggles with tariffs and slowing U.S. sales.
Outlook for the Remainder of 2025
Looking ahead, analysts see reasons for optimism. While tariffs remain a headwind, the impact hasn’t been as severe as many feared. New vehicle sales averaged 16.1 million units SAAR in Q2, with forecasts calling for 15.7 million for the full year.
“We’re cautiously optimistic about the back half of 2025,” said Lithia Motors CEO Bryan DeBoer in the report. “Inventory levels are normalizing, and consumer demand is stabilizing, even if it’s shifting to lower price points.”
The Bottom Line
The first half of 2025 shows a clear divergence: buy-sell activity may be slowing, but dealership profitability remains on solid ground. For operators and investors alike, the message is clear — despite economic uncertainty, franchised dealerships continue to demonstrate their resilience, with fixed operations, F&I, and steady consumer demand keeping performance strong.
Originally published by Digital Dealer — “Dealership Buy-Sell Activity Down 39% Despite Strong Profits” (September 3, 2025).
