"With that push coming out of there, you have many dealers who are contemplating whether they're going to stay in and buy more stores, or if they're just going to get out completely," Biehl said.
Kerrigan Advisors, a sell-side firm in Irvine, Calif., counted a record 289 dealership transactions — deals that included a single store or multiple stores — for 2020 in its year-end Blue Sky Report. That pace was up 24 percent from 2019, and it included 103 deals that closed in the final three months of the year as profits soared. That was the largest number of deals Kerrigan Advisors has counted in any quarter it has tracked. The firm said its previous annual peak for deals was in 2015 when 241 transactions closed.
"A lot of the dealers that we were working with were aware that there would be a change in the political administration, so some were also pulling forward their decision to close, or focusing on closing by the end of the year, because they thought that perhaps their after-tax proceeds would decline with a new administration," Managing Director Erin Kerrigan told Automotive News.
Her firm represented dealers selling 22 dealerships in the fourth quarter.
Kerrigan and other buy-sell experts say the intensified pace of deals has continued in the first quarter of 2021.
Some advisers expect a possible record this year. Reasons for the growth, they said, include accelerated acquisition spending by public auto retailers, many private dealers choosing to take advantage of high prices and sell their stores and increasing consolidation of dealership owners.
Some dealers also are electing to sell at today's high prices rather than invest the money necessary to sell electric vehicles in the future or increase digital retailing capabilities, Kerrigan said.
The Haig Report, published by Haig Partners, a buy-sell firm in Fort Lauderdale, Fla., estimated that 104 dealerships were sold during the fourth quarter, up by a third from a year earlier.
Alan Haig, president of Haig Partners, said the total number of dealerships bought and sold in 2020 as tracked by his firm rose 15 percent to 344 stores. He doesn't call it a record though, noting that it was below the number of sold dealerships — 463 — tracked by Haig Partners for 2015. A large portion of that figure was attributable to Berkshire Hathaway Inc. acquiring Van Tuyl Group and its more than 80 dealerships.
Both Haig and Kerrigan use data from the Banks Report and their own industry analysis to compile the figures.
Kerrigan Advisors also cites Automotive News' deal reporting.
Haig estimates 39 of the 344 dealerships sold last year were purchased by public auto retailers, more than double the pace of 2019.
Spending among the publics accelerated in 2020. Both Kerrigan Advisors and Haig Partners estimate public groups spent nearly $2.5 billion on acquisitions, a record amount.
Lithia Motors Inc. bought about three dozen stores as it continued a lengthy buying spree. Lithia also is expected to acquire southeast Michigan's Suburban Collection, one of the nation's biggest privately owned dealership groups, in the coming weeks.
Other public groups also have shared their plans to buy franchised stores this year. And newcomer LMP Automotive Holdings Inc., a used-car retailer and vehicle subscription company that went public in December 2019, purchased its first six franchised dealerships in the first quarter.