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.
“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.”
