The dealership buy/sell market just set another record. A record 458 transactions changed hands in 2025 — representing 688 franchises sold, up about 5% from 2024 — according to the 2025 Blue Sky Report from Kerrigan Advisors. For owners weighing an exit, the window is wide open and buyers are well capitalized.
Selling a car dealership isn’t like selling most businesses. The price hinges on a “blue sky” multiple applied to adjusted profit, plus the value of hard assets like real estate and parts. And no deal closes without manufacturer sign-off. This guide explains how dealerships are valued, what blue sky is, how multiples vary by franchise, and the buy/sell process from offer to OEM approval.
Key Takeaways
- A record 458 dealership transactions closed in 2025 (688 franchises), a roughly 5% increase over 2024, per Kerrigan Advisors’ 2025 Blue Sky Report.
- The average dealership’s blue sky value rose to about $21.8 million in 2025, up 4.3% from $20.9 million in 2024, according to Haig Partners’ Q4 2025 Haig Report.
- Dealership value typically combines blue sky (a multiple of adjusted net profit) plus tangible assets — real estate, parts, fixtures, and equipment — so two stores with the same profit can sell for very different totals.
- No sale closes without manufacturer approval; many state laws give the OEM a window to consent or exercise a right of first refusal, which can reshape your timeline.
How do you sell a car dealership?
You sell a dealership through a structured process: value the business, prepare financials, market confidentially to qualified buyers, negotiate a purchase agreement, then secure manufacturer approval before closing. Demand is strong — Kerrigan Advisors recorded 458 transactions in 2025, a new high — but each deal still moves through these distinct stages.
The order matters. Most dealers start with a realistic valuation and clean, normalized financials, because buyers and OEMs both scrutinize earnings quality. Then a confidential process puts qualified buyers in competition. Only after a signed buy/sell does the manufacturer’s review begin. Want the broad framework first? Our overview of mergers and acquisitions advisory maps the full path.
How is a car dealership valued?
A dealership’s value is usually two parts added together: blue sky plus tangible assets. Blue sky is a multiple of adjusted (normalized) net profit. Tangible assets cover real estate, new and used inventory, parts, fixtures, and equipment. Haig Partners pegged the average dealership’s blue sky alone at roughly $21.8 million in its Q4 2025 Haig Report.
Why two parts? Because the profit stream and the hard assets are valued differently. A store earning $3 million in adjusted profit might carry a blue sky figure of several times that number, then add the appraised real estate and inventory on top. The result is one total price, but buyers build it from separate components. Curious how the broader principle works? See our primer on how much your business is worth.
What is blue sky and how do multiples work?
Blue sky is the goodwill portion of a dealership’s value — what a buyer pays above hard assets for expected future earnings. It’s calculated as a multiple times adjusted net profit. Multiples vary widely by franchise: Haig Partners’ Q3 2025 report placed Lexus at roughly 9.0x to 10.0x and Porsche around 8.0x to 10.0x, while many domestic stores trade far lower.
What moves a multiple? Franchises with high, durable profits, growth, and a scarce footprint command the top of the range. Brands that are declining, over-dealered, or seen as risky sit at the bottom. Tariffs on imported vehicles and parts are a fresh variable that Haig Partners expects to weigh on import-heavy brands. Adjusting your reported profit correctly is its own discipline — our explainer on a quality of earnings report covers how buyers normalize the numbers that feed the multiple.
What blue sky multiples apply by franchise tier?
Multiples cluster by franchise tier. Luxury and high-line brands typically earn the highest blue sky multiples, strong imports sit in the middle, and most domestic franchises trade lowest. The spread is real: Haig Partners’ published ranges in 2025 ran from low single digits for some domestics up to roughly 10x for the most coveted luxury franchises. The table below is illustrative and rounds to typical tier ranges.
| Franchise tier | Typical blue sky multiple range |
|---|---|
| Luxury / high-line (e.g., Porsche, Lexus, Mercedes-Benz) | ~7.0x – 10.0x |
| Import / foreign (e.g., Toyota, Honda, Subaru) | ~5.0x – 9.0x |
| Domestic (Ford, GM, Stellantis/CDJR) | ~3.0x – 5.0x |
Treat these as starting points, not appraisals. Two same-brand stores can land paragraphs apart on the multiple based on profit history, facility condition, and local competition. A specialist runs the comparables that turn a tier range into a defensible number.
Who buys dealerships, and how does the buy/sell process work?
Buyers are mostly larger dealer groups and well-funded private buyers consolidating the market. Consolidation accelerated again in 2025, with Kerrigan Advisors reporting more than 3,500 franchises transacting over the prior five years — roughly a 15% turnover rate. Most deals happen where buyers already operate, so geographic fit shapes who shows up.
The process runs in stages. You value the store and normalize financials, then market confidentially to vetted buyers. After negotiating price and terms, both sides sign a buy/sell agreement and move into due diligence. Diligence on a dealership is heavy — financials, inventory counts, lease and real estate review, and warranty receivables all get examined. Our M&A process timeline shows how these phases sequence and where deals tend to stall.
One more wrinkle separates dealership deals from ordinary business sales: the manufacturer is the third party at the table. Whether you run a sell-side process or field an unsolicited offer changes your negotiating position — our comparison of sell-side versus buy-side M&A explains why a managed, competitive process usually serves the seller better.
Why does manufacturer approval matter when selling?
Because no dealership sale closes without it. The selling dealer must submit the signed buy/sell to the manufacturer, which vets the buyer’s finances, experience, and facility plans. Many state franchise laws require the OEM to respond within a set window — often around 60 days — and to act reasonably, but the manufacturer’s sign-off remains a hard gate before closing.
There’s also the right of first refusal. Under many franchise agreements, the manufacturer can step into the buyer’s shoes and purchase the store itself — or assign that right to a buyer it prefers. Several states limit or condition this right, and some require the OEM to take the same deal terms. It’s a real variable that can extend timelines or change who ends up owning the store, so it belongs in your plan from day one.
Thinking about selling your dealership? Schedule a confidential consultation with Ivy List Mergers & Acquisitions, a Dallas-based M&A and capital-advisory firm. We bring hands-on experience advising automotive-dealership transactions — you can review our recent transactions for a sense of our track record — and we’ll give you an honest read on value, buyer demand, and the process, with no obligation.
This article is general educational information, not financial, tax, or legal advice — consult qualified professionals about your situation.
Frequently Asked Questions
How much is my car dealership worth?
It depends on adjusted profit and brand. Value typically equals a blue sky multiple times normalized net profit, plus tangible assets like real estate, inventory, and parts. The average dealership’s blue sky alone reached about $21.8 million in 2025 (Haig Partners, Q4 2025), but your figure varies widely by franchise, market, and performance.
What is blue sky in a dealership sale?
Blue sky is the goodwill value — what a buyer pays above hard assets for future earnings. It’s a multiple applied to adjusted net profit, and the multiple depends heavily on the franchise. Haig Partners placed top luxury brands like Lexus near 9.0x–10.0x in its Q3 2025 report, while many domestic stores trade in the low single digits.
How long does it take to sell a dealership?
Plan for several months. Valuation, confidential marketing, negotiation, and due diligence each take time, and manufacturer approval adds its own window — often around 60 days after a signed buy/sell, depending on state law and the OEM. A right of first refusal can extend the timeline further, so build in margin.
Do I need manufacturer approval to sell my dealership?
Yes. The selling dealer must submit the buy/sell agreement to the manufacturer, which reviews the buyer’s qualifications before any sale closes. Many state laws require the OEM to act reasonably and respond within a set period, but approval is mandatory. The manufacturer may also hold a right of first refusal under the franchise agreement.
Is now a good time to sell a car dealership?
Buyer demand has been historically strong. Kerrigan Advisors recorded a record 458 transactions in 2025 (up about 5% from 2024), and blue sky values sat roughly 76% above pre-pandemic levels. Conditions vary by brand and market, though, so an advisor’s read on your specific franchise and region matters more than the headline.
Sources
- Kerrigan Advisors, Dealership Buy/Sell Market Set New Record in 2025 as Consolidation Accelerated and Blue Sky Values Rose (458 transactions / 688 franchises, +5% vs 2024; blue sky ~76% above pre-pandemic; ~$4.07M avg pre-tax earnings; >3,500 franchises transacted over five years), retrieved 2026-06-18 — https://www.kerriganadvisors.com/in-the-news/record-auto-dealership-buy-sell-activity-and-rising-blue-sky-values-defy-tariff-pressures
- Haig Partners, Q4 2025 Haig Report: National Average Blue Sky Multiples (avg dealership blue sky ~$21.8M, up 4.3% from $20.9M in 2024), retrieved 2026-06-18 — https://haigpartners.com/resources/q4-2025-haig-report-haig-partners-national-average-blue-sky-multiples/
- Haig Partners, Q3 2025 Haig Report: Shifts in National Average Blue Sky Multiples (Lexus ~9.0x–10.0x; Porsche ~8.0x–10.0x), retrieved 2026-06-18 — https://haigpartners.com/resources/q3-2025-haig-report-shifts-in-national-average-blue-sky-multiples/
- Haig Partners, Understanding Blue Sky Multiples in 2025: What They Reveal About the Value of Your Dealership (blue sky = goodwill above hard assets, multiple of normalized earnings; tariff impact on import brands), retrieved 2026-06-18 — https://haigpartners.com/resources/understanding-blue-sky-multiples-in-2025-what-they-reveal-about-the-value-of-your-dealership/
- NADA, 2024 Annual Financial Profile of America’s Franchised New-Car Dealerships (16,957 franchised light-vehicle dealers; total sales over $1.2 trillion), retrieved 2026-06-18 — https://www.nada.org/nada/nada-data
- Acquisition Stars, Auto Dealership M&A: OEM Consent, State Franchise Law, and Buy/Sell Structure (manufacturer approval windows, right of first refusal, state-law constraints), retrieved 2026-06-18 — https://acquisitionstars.com/blog/auto-dealership-ma-legal-guide