Private automotive dealership buyers continue to drive deal flow, industry watchers say.

More than 90% of deals in 2025 involved non-public groups, said Matt Cook, CEO and dealer principal with Goode Auto Group, a dealership with 11 franchises in Idaho and Alaska. He expects the trend to continue despite recurring headwinds ranging from tariffs to record-high sticker prices for new and used vehicles.

“Most dealerships have stable profits that are now normalized post-COVID and there’s plenty of buyers looking for stores, from medium-to-large dealer groups to private equity and family office-backed buyers,” Cook said.

Automakers have historically preferred long-term owner-operators over financial investors that move on after several years, but workarounds have emerged, said Zach Kuzemka, CEO of auto retail-focused M&A advisory firm National Business Brokers.

“Private equity and non-traditional capital partners are becoming more active now that they’ve figured out how to satisfy OEM requirements while allowing operators the freedom to run the dealerships as needed,” he said.

Franchise Equity Partners and Open Road Capital are among the private equity firms that have found success in the sector, while Fremont Group and Dobbs Family Automotive are active family offices, Kuzemka said. Franchise Equity, for example, attributes its success to a minority, permanent, and passive investment model.

Mergermarket data underscores the widening activity gap between public and private buyers. Private groups inked 97 of 111 North American auto-retail deals in 2025, or 87%, up from 82%-83% in 2024 and 2023, 68% in 2022, and just 61% in 2021.

Source: Mergermarket, data correct as at 04 Mar 2026

Overall dealership profits remain meaningfully above pre-pandemic levels even after retreating from 2022 highs, said John Shackelford, partner with the Shackelford, McKinley & Norton law firm. That continues to support strong goodwill values and buyer appetite.

The average blue-sky value per dealership – the intangible goodwill value above net tangible assets – rose 7.3% from year-end 2024 through 3Q25, said Anna Brooks Martin, another partner at the firm.

Kuzemka said the market remains highly fragmented with an aging ownership base; the average age of a single-rooftop dealership owner now exceeds 70.

“The auto retail space is still hugely fragmented and ripe for continued consolidation,” he said, noting that the US has roughly 18,000 dealerships, with 92% of dealer groups operating between one and five rooftops.

“Consolidation is a real thing,” Cook added. “If you don’t grow, you die.”

Source: Mergermarket, data correct as at 04 Mar 2026

High-octane mega-deals

Large public dealership groups such as Asbury Automotive, AutoNation and Lithia have been more selective than private players, content to streamline operations and hunt for the largest assets in the market.

“The huge public groups seem to be either doing huge mega-deals or shedding non-core or underperforming stores,” Cook said.

One interesting wrinkle: online used-car retailer Carvana is now buying new-car stores, acquiring five Stellantis dealerships in the past two years in states including Arizona, California, and Texas.

“It will be interesting to see what they do in the future and to see if they expand to buying other brands,” Cook said.

Asbury underscored its appetite for scale in July 2025 when it acquired The Herb Chambers Companies (New England) for USD 1.45bn. “This was a massive platform acquisition,” consisting of 33 dealerships, 52 franchises, and three collision centers, said Christian Scali, founder and managing shareholder of law firm Scali Rasmussen.

“It proved that public retailers are still willing to write billion-dollar checks, but only for ‘trophy assets’ that offer immediate regional dominance – in this case Greater Boston – rather than piecemeal growth,” said Scali, who specializes in retail automotive.

Lithia similarly expanded its luxury footprint in November, acquiring Porsche Beverly Hills and Audi Santa Monica from long-time owner Geoff Emery. The dealerships are expected to generate approximately USD 450m in annualized revenue.

“The deal highlights Lithia’s shift toward high-margin luxury assets that generate massive service revenue,” Scali said.

AutoNation followed a similar playbook in September, acquiring Fletcher Jones Audi and Mercedes-Benz of Chicago from Fletcher Jones Automotive Group. The two dealerships generate roughly USD 325m in annual revenue, AutoNation said.

Scale and growth win the race

Economies of scale are steering consolidation across the sector.

“There is a widening competitive gap between large dealership groups and smaller operators,” said Scali. “Rising fixed costs – including personnel, insurance, and facility upgrades – are easier to absorb across a platform of 15 or 20 or more stores than in a single rooftop.”

Brand strength, demographic fit, facility condition, financial performance and customer satisfaction scores all influence valuation, said Laurence Smith, partner and leader of Day Pitney’s automotive practice.

Luxury brands such as Porsche and Mercedes-Benz, along with top-tier imports like Toyota and Honda, remain highly sought after, Scali said. Valuations are significantly higher in states with growing populations, which include Florida, Texas, Tennessee, and the Carolinas.

“Buyers are paying for future growth,” Scali said. “A store in an area losing population, for example parts of the Northeast or Midwest, will often trade at a discount, even if current earnings are strong.”

Any economic bumps in the road that hurt the profitability of manufacturers could throttle deal flow, Smith warned.

“OEMs have sustained and recognized substantial losses related to the reversal of electrification in the US, and have largely borne the brunt of the tariffs,” he said. Passing costs to dealers through higher new-car prices could dampen sales and widen the valuation gap between buyers and sellers.

For now, Kuzemka said, large groups continue to scale through M&A, gaining synergies through shared back-office operations, vendor savings, inventory optimization, and pricing leverage.