At least 349 dealership buy-sells took place in 2024, including Groove Subaru in Englewood, Colo., bought by Larry Van Tuyl via his Visionary Automotive Group.
Automotive dealerships will keep selling in 2025 at a brisk pace, experts say, though normalizing store profits may slow how fast those transactions close, as buyers more carefully consider what they’re willing to pay for acquisitions.
Top-performing stores, especially those in desirable markets, will keep fetching big bucks. And while dealership sale transaction numbers may not rise to the peak levels coming out of the COVID-19 pandemic, numbers are expected to remain elevated.
Donald Trump’s presidency and the belief his administration will stay friendly to automotive retailers, combined with some cheaper dealership pricing and older dealers looking to sell, will contribute to the bustling buy-sell market this year, according to dealers and the professionals they work with.
The year had a fast start, including a pending blockbuster deal: Asbury Automotive Group said it will pay $1.34 billion to acquire Herb Chambers Cos., one of the largest private auto retailers in the country with 33 stores. That deal is expected to close in the second quarter.
Some private auto retailers also predict a busy buy-sell year.
“I’m definitely still getting as many offerings to look at as I’ve gotten the past two years,” Randy Hoffman, COO of Ed Morse Automotive Group, told Automotive News. The Delray Beach, Fla., group owns about 50 franchised dealerships.
In January, Automotive News asked dealership executives whether they plan to buy or sell stores in 2025.
More than half of the 114 respondents who answered the question in Automotive News’ 2025 Dealer Outlook Survey, or 56 percent, said they did not plan to buy or sell any dealerships this year.
Nineteen percent said they planned to buy dealerships, while 4.4 percent said they planned to sell, 4.4 percent answered they planned to both buy and sell, and 16 percent were unsure.
Automotive News is tracking numerous 2024 deals. It has confirmed at least 349 transactions, involving the sale of at least 500 dealerships. Automotive News counted 707 dealerships trading hands in 382 transactions in 2021, a peak.
Erin Kerrigan, managing partner for sell-side firm Kerrigan Advisors in Incline Village, Nev., told Automotive News that her firm had its busiest year in 2024 and expects it to continue.
“We have a very strong pipeline for 2025, so we expect 2025 will replicate 2024,” she said.
Kerrigan expects buyers will feel more confident in projecting future dealership earnings.
“What I see in 2025, is that now we’re getting back to normalized earnings, and buyers are very excited about investing in profitable businesses,” she said.
And while weaker-performing stores will still sell, Kerrigan said, they just won’t sell at premium prices.
Cautious optimism
In January, Dave Cantin Group, an automotive retail advisory company in New York City, in partnership with Kaiser Associates, released its 2025 Market Outlook Report.
The report predicts elevated buy-sell activity but didn’t provide specifics. It points out that “the unpredictability of political decisions — particularly regarding U.S. trade policies and tariffs, as well as any retaliatory actions could create some challenges.”
“Last year, the industry found its new normal, post COVID,” CEO Dave Cantin said in a news release. “That’s all out the window as we start 2025, because of U.S. and global uncertainty around politics and regulation.”
With valuations normalizing, “acquisition as a growth strategy” will return, the report said.
Public retailers’ plans
The six public auto retailers have signaled mixed intentions for 2025 buy-sell activity.
Lithia Motors Inc. in January purchased Stohlman Subaru of Sterling in Virginia.
CEO Bryan DeBoer described the market for dealership acquisitions as overpriced in a fourth-quarter earnings call Feb. 12. DeBoer said those feelings have changed since Lithia’s earnings call in October, when the company felt “things were softening a little bit in pricing.”
AutoNation Inc. CFO Thomas Szlosek said during a Feb. 11 earnings call that predicting buy-sell opportunities is difficult, but the “landscape was improving” during the last half of 2024, and that the company is “starting to see a more regular flow of potential opportunities.”
Sonic Automotive CEO David Smith, meanwhile, said during the company’s Feb. 12 earnings call that the company was officially back in the market for acquisitions.
The company in December entered Louisiana with the purchase of an Audi dealership, and it sold two dealerships last year. Now, it has several other deals already “in the hopper.”
While he did not disclose specifics, Smith told Automotive News that Sonic will focus energy on dealerships in growth markets, meaning they want to buy in cities that have growing populations and that are family- and business-friendly.
“We’ve been seeing more and more interesting opportunities,” Smith said.
Longer process for some deals
Joe Ozog, president of buy-sell firm Ozog Consulting Group, said he’s anticipating a potential slowdown in third-quarter activity followed by an uptick in the fourth quarter, given that dealership transactions typically take nine months to close after pricing.
“Our firm experienced a roughly 20 percent decline in pricing requests in the fourth quarter; however, inquiries have since increased,” Ozog told Automotive News. “Notably, January pricing requests have been the highest we have seen.”
He believes the overall transaction numbers will be comparable to 2024.
Stephen Dietrich, partner at Holland and Knight, told Automotive News that his law firm also is seeing some slowdowns in finalizing deals. Part of that, he said, is related to negotiating prices.
Dietrich said the extra thought going into pricing, more intense underwriting with banks and the processing of big-value deals all take time.
So, some deals initiated this year may not actually close in 2025.
“You might not get as many deals closing at the end of the year as we might normally see if a deal starts in August or September,” Dietrich said.
Looking ‘aggressively’
Ed Morse Automotive’s Hoffman counts a return to more “realistic” dealership pricing as one factor helping fuel buy-sell activity, along with favorable market conditions.
He expects his group, which saw most of its growth since 2018, to keep growing this year. The group in 2024 completed two automotive acquisitions, including a six-store deal in Arizona and buying a Chevrolet dealership in Illinois.
Hoffman said they’re “still looking at opportunities aggressively.”
“Having said that, this is the first time in, I’m going to say five-plus years, where we don’t have a deal inked, waiting to close,” Hoffman said.
Gail Kachadourian Howe and John Huetter contributed to this report.