Report: The purchase market for retailers will hit another record in 2024

The purchase sales market for car dealers continues to increase at a record pace.

Kerrigan Advisors 2024 Blue Sky Report showed that in 2024 the busiest year of all time and 438 completed dealer transactions were 10% compared to the record of 2023 of 397. These transactions were 697 sold franchise companies, the second most common and an increase of 2.5% compared to 2023, an increase in the report, which, according to the report, in the future of automatic sales and the profitability and profitability of the industry.

The report stated that the perception was reinforced by strong sales of the new vehicle in the fourth quarter, which signaled a market with a significant growth potential, which may have exceeded the annual turnover of 17.55 million that was determined in 2016, provided that trading policy remains favorable.

Kerrigan Advisors said that the consolidation trend continued in 2025, since more than a quarter of US dollars have been accumulated in front of taxes since pandemic and a large part of it has been on the balance sheets.

“Since the interest rates are lower, the inflation and the improvement of the vehicles and the affordability of the vehicle were a significant increase in the buyer all year round,” said Kerrigan Advisors founder and managing director Erin Kerrigan. “This self-confidence became even stronger after the election, since the dealers have a strong back rash for new vehicle sales experienced and unambiguous evidence of the demand for the pent-up consumers after years of limited offer.”

Kerrigan said the buy-sell market should continue to grow because many dealers see the lower result of 2024 than the ground of the market, although it remained 78% higher than before the pandemic, even if it was cleaned up in inflation.

According to the report, the gross profit stabilizes per new vehicle, which stabilizes the average of 2024, and the volumes of the new vehicle that return to historical interest rates, it is expected to be far beyond the pre-pandemic level before pandemic, which leads to potential gross profit of more than $ 40 billion.

“In view of this backdrop,” said Kerrigan, “buyers consider this growth potential in their dealer acquisitions, the greater motivation and a stronger conviction in the evaluations of Blue Sky.”

The managing director of Kerrigan Advisors, Ryan Kerrigan, agreed to this assessment and found that Blue Sky values ​​in 2024 were 19% below its climax in 2022, but thanks to the active purchase-sell market remained historically high and probably even increased.

Indeed, the company of 2024 from 2024 against 2022 by 258% of dealers who wanted to sell a car dealership, as well as an increase in those who want to grow, and a decline in dealer planning by 12% without change.

“Many dealers see in 2024 as a rating point, whereby Blue Sky values ​​are expected to be recovered in addition to recovery in the industry results in 2025, and the public markets reflect this outlook,” said Ryan Kerrigan. “If we look at 2025, the strong demand from the buyers and an improved profit environment indicate that the Buy-Sell market remains very active.

“With rising reviews, we expect another robust year for dealer transactions. Since dealers and their families are planning in 2025 and beyond, the choice between growth and exit will be at the front and at the center, while inertia a less sustainable strategy on the developing market seems to be. “

The report stated that the brands of car retail in “Have” and “Have not” brands made the franchisee diversification in 2024 for the success of the dealer groups “critical”.

Strong franchise companies survived with low stocks and persistent high gross wins, while weaker franchise companies with balloon deposits, rising floor plan and falling gross wins had to struggle. This created a landscape of “winners” such as Lexus, Toyota, BMW and Honda, which recorded the highest ratings in the industry and the supply of the days far below the average of the industry and “losers” such as Lincoln, Nissan and Stellantis, who had the highest days and the lowest ratings.

The report has fueled this market shift, the report says, especially with below-average brands such as Chrysler-Dodge-Jeep-Ram, Nissan and Infiniti.

“It is not surprising that the reviews for below -average/weaker franchise companies decreased sharply in 2024 because the dealers' trust went back to these OEMs,” said Kerrigan. “Some dealers with fighting franchise companies were exposed to financial burden for the first time since the great recession, which led to an increase in the needy sales and too deeply reduced ratings compared to their pandemic highs.

“Since the average dealer has fewer than three shops, the influence of a weak franchise was more difficult to absorb.”

The highlights from the report include:

• The largest private dealer groups grew for the fastest prices in 2024, which makes up more than 30% of industrial sales, and 28% of the franchise companies acquired, the highest level. Its sales per roof now exceed the NADA average by 18% ($ 13.1 million). In the meantime, the US dealer groups remained net buyers of dealers and sold a record of 47 franchise companies more than they acquired.
• In the previous year, the multi-dealership deals went back from 32% of the purchase sell activities from 2023 to 22%, the lowest percentage per record, but single-point transactions rose and decreased to the average number of franchise companies sold by 7% the previous year. However, the 97 multi-dealership transactions were the third most common and an increase of 67% compared to the average average before pandemic of 58.

• The US public dealers ended the year with a Blue Sky multiple times 7.7 times below the top luxury average focus of about 8.5x, but above the top non-luxury average of around 6.5x.

• 30% of the invested capital of the US public dealer groups went to international and other acquisitions – the highest stock. Capital invested in the US acquisitions fell to 22%, 37% in 2023.

• Real estate values ​​for dealers have profound effects on the purchase landscape, since strong retail sales and increased construction costs keep the evaluations of dealers in property because the demand exceeds the supply. Kerrigan Advisors estimates that the traders' real estate values ​​have increased by an average of 51% to $ 13.9 million since 2014, which increases the proportion of overall transaction values.

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