The U.S. auto retail industry entered 2026 from a position of strength, even as profits normalized from the record levels seen during the pandemic, according to the newly released Q4 2025 Haig Report® from Haig Partners.

The report shows that demand for dealerships among buyers remains robust, with 616 dealerships bought or sold in 2025, while blue sky values continue to remain far above pre-COVID levels.

At the same time, dealership profitability is stabilizing after several years of normalization. The average publicly owned dealership generated $4.1 million in adjusted pre-tax income in 2025, slightly higher than in 2024.

Dealership earnings remain historically strong and continue to attract investors.

Key Takeaways from the Q4 2025 Haig Report®

• The buy-sell market remains active: After a slow start in early 2025, dealership transaction activity accelerated in the second half of the year. Total buy-sell activity reached 616 dealerships sold, 50% higher than the annual average from 2015 to 2019.

Large buyers are increasingly focused on acquiring higher-volume dealerships, stores with strong fixed operations, and franchises with limited capital expenditure requirements. Smaller buyers are scooping up smaller stores and distressed franchises such as CDJR and Nissan.

• Dealership values remain elevated: The estimated average blue sky value of a publicly owned dealership increased 2.2% in 2025 to $19.0 million, up from $18.6 million in 2024.

Although values remain below the peaks reached in 2022 and 2023, they are still well above pre-pandemic levels.

• Profitability remains strong despite margin pressure: Front-end margins on new vehicles declined during 2025 and used vehicle gross profits remained compressed. However, strong performance in finance and insurance and fixed operations helped support dealership earnings.

These areas continue to provide the most dependable sources of profit for dealers as the industry returns to more traditional operating conditions.

• New vehicle sales remained resilient: U.S. new vehicle sales totaled 16.2 million units in 2025, a strong performance considering tariff pressures, affordability challenges, and the loss of federal EV incentives late in the year.

Most industry forecasts expect 2026 sales to remain close to this level.

Strategic Outlook for Dealership Owners

“Auto retail remains one of the most attractive industries for long-term investors,” said Alan Haig, President of Haig Partners. “Even as profits normalize from the extraordinary levels seen during the pandemic, demand for high-quality dealerships remains very strong. Larger buyers continue to pursue scale and are focused on the best franchises and the highest throughput stores. For dealers considering selling, the current environment still offers an opportunity to achieve historically strong valuations.”

Economic Environment Moving Into 2026

The broader economic backdrop is mixed. U.S. real GDP growth slowed to 1.4% in the fourth quarter of 2025, bringing full-year growth to 2.2%.

Inflation declined to 2.4% in January 2026, approaching the Federal Reserve’s target and creating potential room for additional interest rate cuts later in the year.

“Auto retail has proven resilient through a wide range of economic cycles,” said John Murphy, Managing Director – Strategic Advisory. “New vehicle demand held up well in 2025 despite affordability challenges and tariff disruptions. Looking ahead, the key risks for the industry include geopolitical conflict, potential changes to trade policy, and ongoing pressure on vehicle affordability.”

What Dealers Should Watch in 2026

The Haig Report® highlights several factors that could influence dealership performance in the year ahead, including:

• Potential renegotiation of the U.S.-Mexico-Canada Agreement (USMCA) and its impact on vehicle production costs
• Continued affordability pressure for consumers, particularly in entry-level segments
• The increasing importance of fixed operations and F&I as new vehicle margins normalize
• Ongoing consolidation across the dealership landscape

Despite these challenges, Haig Partners expects dealership buy-sell activity to remain strong as investors continue to pursue opportunities in auto retail.

As consolidation continues across the industry, Haig Partners is actively advising dealers who are looking to grow their platforms, divest select assets, or exit the industry entirely. The firm works closely with dealer principals and families to evaluate strategic options and to ensure transactions are executed through a confidential, competitive and disciplined process designed to maximize value.

Haig Partners strongly encourages dealers considering any form of dealership buy-sell transaction to work with an experienced M&A advisor who understands the complexities of the automotive retail industry. Proper representation helps dealers navigate valuation, structure negotiations effectively, protect confidentiality and ultimately achieve the best possible outcome for their business and their family.

About The Haig Report®

The Haig Report®, the longest-published quarterly report tracking trends in auto retail and their impact on dealership values, includes data and analysis on the performance of auto dealerships, discusses noteworthy events impacting the automotive retail industry, identifies trends in the M&A market for dealerships, provides guidance on estimated value ranges for different franchises and shares an outlook for the automotive retail buy-sell market. The Haig Report® is based on data gathered from reputable public sources and interviews with leading dealer groups and dealers, bankers, lawyers and accountants who specialize in auto retail.

About Haig Partners

Haig Partners is a leading buy-sell advisory firm that helps owners of higher-value dealerships maximize the value of their businesses when they are ready to sell. The team at Haig Partners has advised on the purchase or sale of 580+ dealerships and has represented 32 dealership groups that qualify for the Top 150 Dealership Groups list published by Automotive News, more than any other firm. Clients of Haig Partners benefit from the group's collective experience as previous executives with leading companies such as AutoNation, Bank of America, Credit Suisse, Deloitte, FORVIS, J.P. Morgan, Lexus, Porsche and Toyota Financial Services. Leveraging its unmatched expertise and extensive relationships, Haig Partners guides clients to successful outcomes through a confidential and customized sales process. The firm authors the Haig Report®, the leading industry quarterly report that tracks trends in auto retail and their impact on dealership values, and co-authors NADA’s Guide, “Buying and Selling a Dealership.” Haig Partners team members are frequent speakers at industry conferences and are regularly quoted in reputable media outlets, including Reuters, Forbes, The Wall Street Journal, The New York Times, CNBC, BBC, Automotive News, Wards and CarDealershipGuy. Haig Partners also hosts Maximizing Value Conferences that provide dealers with proprietary research into the auto retail industry and insights into dealership buy-sell trends, as well as content about how auto dealers can improve their operational performance. For more information, https://www.haigpartners.com.

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“Auto retail remains one of the most attractive industries for long-term investors,” said Alan Haig, President of Haig Partners.