U.S. Acuto Dealership Buy-Sell Market Gains Momentum in Q1 2026 as Private Buyers Drive Activity, Haig Report Finds
The U.S. automotive dealership buy-sell market recorded a strong start to 2026, with transaction activity rising significantly despite moderating dealership earnings, according to the latest quarterly report from Haig Partners LLC. The firm’s Q1 2026 Haig Report®, which analyzes dealership mergers and acquisitions, franchise valuations, profitability trends, and broader market dynamics, highlights a market that remains active but increasingly selective.
According to the report, dealership merger and acquisition activity accelerated sharply during the first quarter of 2026. An estimated 139 dealership rooftops changed ownership, representing a 39% increase compared with the first quarter of 2025. The figure also exceeded Q1 2019 levels by 29%, making it one of the strongest periods for dealership transactions since before the COVID-19 pandemic reshaped automotive retail economics.
The findings suggest that confidence in the long-term outlook for franchise auto retail remains strong, particularly among private operators. Independent buyers accounted for 96% of all acquisitions during the quarter, signaling continued enthusiasm for dealership ownership despite broader economic uncertainty and a gradual normalization in dealership profitability.
At the same time, larger transaction structures became increasingly prominent. Multi-dealership acquisitions rose 54% year-over-year, indicating that larger dealer groups continue to refine their portfolios through strategic purchases and divestitures.
“Dealers still strongly believe in the future of auto retail, but the market is becoming much more selective,” said Alan Haig, president of Haig Partners. “Buyers are aggressively pursuing strong franchises with healthy profitability, disciplined inventories and good growth prospects, while weaker franchises are becoming increasingly difficult to sell.”
Dealership Profitability Begins to Stabilize
While dealership buy-sell activity expanded during the quarter, dealership earnings moderated compared with unusually elevated levels seen in recent years.
Average quarterly profits for publicly traded dealerships declined 16% year-over-year, reaching approximately $824,000 per dealership in Q1 2026. However, the report notes that comparisons with Q1 2025 are challenging because dealership earnings last year benefited from tariff-related pull-ahead demand that temporarily boosted vehicle purchases.
A broader trailing twelve-month view presents a more stable picture of dealership economics. Publicly owned dealerships generated an average adjusted pre-tax income of approximately $4 million over the prior twelve months, representing only a 3% decline from 2025 levels.
Even with recent moderation, dealership profitability remains substantially above pre-pandemic benchmarks. According to Haig Partners, current dealership profits are still 109% higher than the average quarterly pre-tax income of $394,000 recorded before COVID-19 disruptions transformed retail automotive operations.
The report suggests that dealership profitability may be entering a more sustainable phase after years of volatility. Rather than indicating deterioration, the decline in profits appears to reflect a broader normalization process following unprecedented gains experienced during supply shortages and elevated pricing conditions.
Operationally, dealerships continue to rely heavily on finance and insurance products and service operations to offset pressure in vehicle sales margins.
Finance and insurance (F&I) gross profit per vehicle retailed reached a new record in Q1 2026, climbing 4% year-over-year to $2,627. Fixed operations gross profit, which includes service and parts businesses, increased 3.6% over the same period.
Meanwhile, profitability from new vehicle sales declined. New vehicle gross profit per retailed unit fell 9% year-over-year to $2,881, while used vehicle profitability remained relatively flat.
The results indicate that while variable operations are facing modest margin pressure, dealerships have adjusted business models to depend more heavily on recurring service revenue and F&I income streams.
Blue Sky Valuations Experience Modest Decline
The report also found that dealership blue sky values — a key measure used in dealership valuations that reflects goodwill and intangible franchise worth — declined modestly during the quarter.
Haig Partners estimated the average blue sky value of a publicly traded dealership at $18.2 million in Q1 2026, down 4% from $19 million at the end of 2025.
Despite the decline, valuation levels remain significantly elevated compared with historical norms and are still roughly double pre-pandemic averages.
According to the report, the decline reflects softer earnings and franchise-specific valuation adjustments rather than a broader weakening in buyer confidence.
“For dealers with the right franchises in the right markets, valuations have never been stronger,” Haig said. “Q1 2025 was an unusually elevated baseline, and winter storms across the Eastern U.S. suppressed showroom traffic this quarter. We are not concerned about this pullback.”
The firm indicated that dealerships with strong profitability, disciplined inventory management, and favorable geographic positioning continue to attract aggressive buyer interest.
Buick-GMC Gains Ground While Volkswagen Faces Pressure
Franchise-specific performance continued to influence valuation trends during the quarter.
Among the brands receiving positive adjustments, Buick-GMC saw an increase in valuation multiples. Haig Partners upgraded Buick-GMC dealerships by 0.25x at both ends of their valuation range, bringing the franchise in line with Chevrolet dealerships at 3.75x to 4.75x earnings multiples.
The improvement was attributed to stronger product demand, improved front-end gross profits, and favorable product performance across the lineup.
Vehicles such as the Buick Envista and Encore GX are reportedly attracting new customers to the brand, while premium GMC variants such as the Denali and AT4 continue generating stronger profit margins than comparable Chevrolet products.
The report also highlighted improved relationships between General Motors and dealers, with some franchise operators reporting stronger communication and collaboration from the automaker.
In contrast, Volkswagen experienced a downgrade in franchise valuation.
Haig Partners moved Volkswagen away from a traditional earnings multiple framework to a flat dollar-value range of $0 million to $5 million, citing persistent challenges in the U.S. market.
The downgrade reflects concerns around limited U.S.-specific product offerings, weakening dealer sentiment, and strategic decisions surrounding Scout direct sales, which bypass traditional dealer networks.
According to the report, Volkswagen dealerships are increasingly less attractive as standalone acquisition targets and, in certain situations, may reduce the overall appeal of broader platform transactions.
Mercedes-Benz Emerges as Strategic Opportunity
One of the strongest franchise narratives highlighted in the report centered on Mercedes-Benz, which Haig Partners described as an increasingly attractive luxury retail opportunity.
Dealer sentiment surrounding the brand has reportedly improved significantly since 2024, supported by management changes and a renewed emphasis on regionalized dealer support.
Additional improvements include expanded lease incentives on core internal combustion engine models, improving vehicle quality, and more collaborative factory-dealer relationships.
Mercedes-Benz recorded the largest increase of any brand in the NADA Winter 2026 Dealer Attitude Survey Overall Index Ranking, according to the report.
The luxury automaker has also reduced reliance on electric vehicle models that previously generated losses for both manufacturers and retailers. EV sales reportedly declined by nearly two-thirds compared with their 2023 peak, while sales of profitable internal combustion and hybrid SUVs increased more than 30%.
Core SUV models, including the GLC, GLE, and GLS, accounted for 61% of retail sales during Q1 2026 and recorded growth exceeding 22%.
Additionally, Mercedes-Benz has broadened its pool of approved dealership buyers, allowing greater participation from operators without existing Mercedes ownership. The policy shift has reportedly increased competition for stores and pushed valuation multiples higher.
Haig Partners maintained Mercedes-Benz valuation multiples between 8.0x and 9.0x earnings, placing the brand at or slightly above BMW in buyer preference rankings.
“Mercedes-Benz represents the kind of opportunity that doesn’t come along often,” Haig said. “Buyers who get in now, before the earnings recovery is fully visible in the numbers, are likely to be rewarded.”
Market Activity Remains Strong
The dealership buy-sell environment in Q1 2026 remained comparable to activity levels recorded during the high-volume years between 2021 and 2023.
Regional activity remained concentrated in the Southeast, which accounted for 35% of all dealership rooftops sold during the quarter. The Midwest ranked second, representing 28% of total transactions.
Several structural factors continue to drive dealership sales, including an aging dealer population, increasing facility investment requirements, mounting pressure on weaker-performing franchises, and strategic portfolio optimization by large dealer groups.
Many buyers are reportedly deploying strong balance sheets built during the pandemic period while focusing acquisitions on scalable operations, favorable Sunbelt markets, and franchises with demonstrated earnings resilience.
Among the quarter’s most closely watched deals was Penske Automotive Group’s acquisition of Lexus of Orlando and Lexus of Winter Park. The transaction reportedly carried a blue sky and intangible value of approximately $538 million, while the total deal value approached $646 million when including real estate and fixed assets.
The transaction highlighted the premium valuations attached to highly desirable luxury franchises in strong regional markets.
“The buy-sell market has reached a healthy equilibrium,” Haig said. “Sellers are no longer asking for COVID-era multiples, and buyers have accepted that pre-COVID pricing is gone. That common ground is driving volume.”
Haig added that owners of high-performing franchises may still benefit from favorable timing conditions, while sellers of weaker franchises may need to adjust expectations to align with evolving market realities.
The report also touched on broader policy concerns affecting the dealership sector, including comments from U.S. Senator Bernie Moreno regarding proposed legislation tied to connected vehicle security and restrictions on Chinese-manufactured connected vehicle components.
According to the report, the legislation could carry significant implications for the U.S. automotive retail landscape, particularly as concerns around data security, supply chains, and domestic automotive competitiveness continue to grow.
Overall, the Q1 2026 Haig Report suggests dealership transaction activity remains healthy despite moderating profitability. While buyers continue to pursue high-performing stores aggressively, franchise quality, profitability, and strategic positioning are increasingly shaping transaction outcomes in a more disciplined market environment.
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