Profits, Values are Down-Temporarily
For most of the last decade, the conventional wisdom in automotive retail was simple: if you were thinking 
about selling, there was no reason to wait. Profits were strong, blue-sky multiples expanded, and capital—both private and institutional—was eager to buy scale. That environment no longer exists.
As the industry enters 2026, the numbers tell a very different story. Sales are down from recent peaks, margins have normalized or compressed, and dealership valuations have followed the same downward trajectory. The result is a buy-sell market defined less by opportunity than by hesitation. For many dealers, selling today would mean leaving significant long-term value on the table.
The latest data from Automotive News confirms what many dealer principals already feel intuitively: this is not a seller’s market.
A Buy-Sell Market on Pause
According to the Automotive News 2026 Dealer Outlook Survey, 70 percent of dealers say they do not plan to buy or sell a dealership this year—up sharply from 56 percent in the 2025 survey. Only about one-fifth of respondents plan to pursue acquisitions in 2026, while the majority intend to sit on the sidelines.
That alone is telling. Buy-sell markets depend on confidence—confidence in earnings durability, in franchise direction, and in broader economic stability. When seven out of ten owners opt to do nothing, it signals widespread caution rather than strategic inertia.
One Oregon dealer quoted in the survey put it plainly: “Dealerships are too expensive right now.” But that comment, while accurate in certain franchise segments, only tells part of the story. From a seller’s perspective, the more important reality is that dealerships are not expensive enough—at least not relative to what owners could reasonably expect in a more favorable cycle.
Valuations Follow Profits—And Profits Are Down
Dealership valuations are, at their core, a function of earnings. Blue sky multiples expand when profits are strong, predictable, and perceived as sustainable. They contract when earnings fall or when future cash flow becomes harder to forecast.
Across much of the industry, profits have declined materially from the extraordinary highs of 2021 and 2022. New-vehicle margins have flattened, incentive spending has crept back, floorplan expense remains elevated, and fixed operations—while still healthy—are no longer carrying the entire enterprise the way they did during the supply-constrained years.
Lower profits do not simply reduce valuation in a linear way. They often compress multiples as well, creating a double hit to enterprise value. A dealership earning less and trading at a lower multiple can see its valuation fall dramatically—even if the underlying business remains fundamentally strong.
This is the crux of the current dilemma. Selling now locks in today’s earnings environment, not tomorrow’s.
Strategic Patience Over Forced Timing
Oregon dealer Clint Newell offers a useful example of how many long-time operators are thinking about this moment. Newell, owner of Clint Newell Auto Group, which includes Chevrolet-GMC and Toyota stores in Roseburg, last acquired a dealership in 2006. Today, his focus is not on expansion or exit, but continuity.
In the Automotive News article, Newell explains that he is in the early stages of a succession plan with his son, Cameron Newell, and has no intention of selling in the current environment.
“We’re really not in a position to bite off anything new at this point,” Newell said. “Second thing is we’re not looking to sell either.”
That mindset reflects a broader recalibration among dealers. Instead of reacting to short-term market conditions, many are prioritizing internal stability—management depth, succession planning, operational efficiency—while waiting for external conditions to improve.
Uncertainty Still Weighs on Decision-Making
Macroeconomic and policy uncertainty also plays a role in suppressing buy-sell activity. According to JT Taylor, managing partner at Accrual Equity Partners and board adviser to National Business Brokers, lingering questions around trade policy, regulatory direction, and broader economic alignment have made dealers more cautious.
When the survey was conducted in December and January, Taylor noted, there was “enough frothiness” around issues such as North American trade relationships and policy execution to cause hesitation. That uncertainty affects not only buyers, but sellers as well. In an environment where future conditions are unclear, committing to a permanent exit becomes far more difficult to justify.
Waiting for the Cycle to Turn
Importantly, this period of caution does not appear permanent. Data from Kerrigan Advisors suggests that dealer sentiment is beginning to shift. The firm’s 2026 dealer survey indicates that, for the first time since 2021, more dealers expect profits and valuations to increase rather than decline in the year ahead.
That optimism is grounded in the expectation that margins will stabilize, inventory will normalize without oversupply, and consumer demand will regain firmer footing. If those conditions materialize, dealership earnings—and valuations—are likely to follow.
For owners who can afford to wait, the logic is straightforward. Selling into a trough rarely produces optimal outcomes. Waiting for earnings recovery and multiple expansion, even if it takes several years, can meaningfully change the economics of an exit.
The Risk of Selling Too Early
There is also an opportunity-cost risk to selling now. Many dealers built their businesses over decades, reinvesting profits, cultivating community relationships, and developing teams. Exiting during a period of compressed value effectively transfers future upside to the buyer.
This is particularly true for owners with strong fixed operations, well-run management teams, and desirable franchises. Those assets do not disappear in a down cycle—they are merely undervalued by the market at that moment.
For dealers without immediate liquidity needs, no succession pressure, and no operational distress, patience may be the most rational strategy available.
A Market That Rewards Discipline
None of this suggests that buy-sell activity will stop altogether. Certain strategic buyers will continue to pursue acquisitions, and some sellers will exit for personal or financial reasons. But broadly speaking, the current market rewards discipline more than urgency.
The lesson of 2026 so far is not that dealerships are broken or declining assets. It is that valuations move in cycles, just like sales and profits. Selling at the wrong point in that cycle can permanently impair value.
For many dealers, the smartest move right now is not to sell—but to wait.