The U.S. dealership buy-sell market is proving to be super-charged this year, as activity in the first nine months is almost double prepandemic volume, according to Kerrigan Advisors data.

The sell-side firm said 330 transactions took place during the period representing 544 franchises. That’s up from 313 deals over 528 franchises during the same stretch last year and on track for a record year.

In 2019, the last full year before the pandemic, there were 161 transactions totaling 233 franchises, Kerrigan said.

The dealership deals pipeline is being filled from a confluence of factors, the firm said: moderating industry profits creating clearer valuations; more sellers emerging due to pandemic-era profits moving dealers to retire earlier; dealer groups selling weaker franchises; and large auto groups’ focus on scaling.

“Most now believe a ‘new normal’ has arrived and are comfortable basing their valuations on current earnings,” Kerrigan’s third-quarter Blue Sky Report says.

The firm estimates that auto dealer profits ballooned between 2020 and 2024 to three times the level reached in the previous four years to $278 billion pretax. The flush conditions inspire more dealers to sell their businesses, especially those with no succession plans, said Kerrigan, which estimates that blue-sky values for most franchises are healthy, though 19% off their historical peak.

This year’s conditions point to continued robust buy-sell activity next year, Kerrigan foresees, due to the fact that much of the accumulated earnings haven’t been leveraged, along with moderating interest rates, increased incentive spending, normalizing new-vehicle gross profits, and industry growth prospects during a second Trump administration.

The firm said franchises with the highest buy-sell market share in their segments for the period were CDJR, with 32% domestic market share, Nissan, with 20% import nonluxury share, and Infiniti, with 13% import luxury market share.

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