Critical Shifts:
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M&A Activity Surges: Dealership buy-sell activity accelerated sharply in Q1 2026, with an estimated 139 rooftops changing hands (a 39% year-over-year increase). This surge was heavily driven by private buyers, who accounted for 96% of all acquisitions, and a 54% jump in multi-dealership transactions.
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Profit Stabilization Post-Pandemic: While average quarterly profits declined 16% year-over-year to $824,000 due to a tough Q1 2025 comparison, trailing twelve-month profits stabilized at $4.0 million. This remains 109% above pre-COVID levels, indicating earnings are settling at a structurally higher baseline.
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Shifting Profit Drivers & Valuations: Variable operations face pressure as new vehicle gross profits fell 9%, but Finance & Insurance (F&I) hit a record $2,627 per vehicle and fixed operations grew 3.6%. Consequently, average blue sky values dipped slightly by 4% to $18.2 million, though buyers remain highly selective, aggressively pursuing top-tier franchises.
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Haig Partners LLC, a buy-sell advisory firm to auto retailers in the U.S., released the Q1 2026 Haig Report, its quarterly analysis of dealership buy-sell activity, blue sky valuations, franchise performance, and the broader economic forces shaping automotive retail.
Dealership M&A activity accelerated sharply in Q1 even as earnings moderated from historically elevated levels. An estimated 139 rooftops changed hands, a 39% increase over Q1 2025 and 29% above Q1 2019, the last full year before the pandemic permanently reshaped dealership economics. Private buyers accounted for 96% of all acquisitions, a clear signal that independent operators remain highly confident in the long-term value of franchise auto retail. Multi-dealership transactions rose 54% year-over-year, reflecting a market increasingly shaped by larger operators executing deliberate portfolio strategies.
“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.”
Average quarterly dealership profits declined 16% year-over-year to approximately $824,000 per publicly traded dealership in Q1 2026, a tough comparison given that Q1 2025 was boosted by tariff-driven pull-ahead demand. The more meaningful measure is the trailing twelve-month view: the average publicly owned dealership generated $4.0 millions of adjusted pre-tax income, down just 3% from 2025. Dealership profits also remain 109% above the pre-COVID average of $394,000, suggesting the post-pandemic normalization has largely run its course and earnings are beginning to stabilize at a structurally higher level.
F&I gross profit per vehicle retailed set a new record in Q1 2026, climbing 4% to $2,627. Fixed operations gross profit grew 3.6% year-over-year. New vehicle gross profit per vehicle retailed declined 9% to $2,881 and used vehicle profits were largely flat. The picture is of a dealership model that has adapted well, variable operations under modest pressure, with fixed ops and F&I carrying the load.
Haig Partners estimates the average blue sky value of a publicly traded dealership declined 4% to $18.2 million in Q1 2026, down from $19.0 million at year-end 2025. The dip reflects softer profits and a franchise valuation adjustment detailed below — not a structural shift in market confidence. Blue sky values remain roughly double their pre-pandemic average.
“For dealers with the right franchises in the right markets, valuations have never been stronger,” said Haig. “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.”
