10 • December 2025 • Powersports Business

BY PAULINA MATEL & BRAD STANEK CONTRIBUTORS

As we move into 2026, the economic landscape is sending a clear message to powersports dealers: be tactical, not reactive. Growth is slowing; rates are poised to decline, and the forces that drove record dealership valuations in recent years are shifting. For dealer principals, this next phase isn’ t just about surviving the cycle— it’ s about using it to clarify your growth, succession, exit, or reinvestment strategy.

Our team, the Stanek-Haack Group at Morgan Stanley, spends every day helping dealers bridge those two worlds: business and personal. The question we’ re all asking is simple: What does 2026 mean for your dealership’ s value and your family’ s financial future?

BIG PICTURE Morgan Stanley’ s research projects a deceleration in global and U. S. growth into 2026 compared with the post-pandemic rebound years. Inflation pressures have eased, and the Federal Reserve is expected to shift gradually toward rate cuts as the economy cools.

For dealers, this combination of slower consumer demand, but improving financing conditions creates a mixed environment. Lower rates help with affordability and floorplan costs, but muted growth and regional variability may pressure unit sales and margins.

Why It Matters: Lower interest rates can increase buyer activity and make dealers easier to finance— both for consumers and for buyers looking to acquire dealerships. For owners considering a sale or succession, this can improve valuation multiples.

INDUSTRY SIGNALS After years of record highs, the powersports market is settling into a more normalized

Inflation pressures have eased, and the Federal Reserve is expected to shift gradually toward rate cuts as the economy cools.

rhythm. Dealers have seen softening new-unit sales and lingering import delays, while used inventory remains strong. At the same time, analysts forecast steady long-term expansion in the powersports sectors.

Why It Matters: These types of markets reward disciplined operators, who continue to remain profitable. Dealerships with predictable earnings, stable inventory, and consistent revenue growth are better positioned to exit or succeed in the near future, even as growth slows.

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IMPLICATIONS FOR DEALERS As we enter 2026, the broader economic backdrop carries very real implications for powersports dealerships— not just on the revenue side, but also in how principals plan their personal wealth, business ownership transition, and capital structure. According to Morgan Stanley, U. S. real GDP growth is expected to slow down( with estimates around 1 % for 2025−2026), due to the drag of tariffs, labor force constraints, and diminished fiscal stimulus. At the same time, the Fed is likely to hold rates higher for longer— the easing cycle is expected into 2026 rather than immediately— which means borrowing costs remain elevated in the near term. For a dealership principal, this has an array of consequences: 1. Consumer affordability: Slower growth and elevated rates mean consumers may be more selective about big discretionary purchases.

2. Financing and capital flexibility: With current rates high but expected to moderate later, dealers may benefit from multiple bank relationships as they negotiate and review financing terms.

3. Wealth planning urgency: Given the slower economic outlook, any near-term dip in earning will impact valuations and personal liquidity. Dealers should model their personal cash flow and investment portfolios as if business earnings remain moderate. Consider stress-testing your portfolio to understand various implications, such as your retirement funding, transitioning the business, or reinvesting some of your profit.

4. Diversification and asset protection strategies: With the economy showing signs of plateauing, it’ s more critical than ever to diversify out of the dealership risk into broader investment portfolio— thinking about the wealth you will carry forward beyond the business. That means considering real estate, investable assets, cash structuring, and generation of other income streams.

In short, the current market environment magnifies the importance of proactively aligning dealership strategy and personal financial planning. Dealers who treat their dealership and their wealth as intertwined— not siloed— are better positioned to convert a successful operating year into a lifelong financial freedom.

Brad Stanek, CFP, executive director with The Stanek-Haack Group at Morgan Stanley in Chicago( brad. stanek @ ms. com), and Paulina Matel, CFP, vice president with The Stanek- Haack Group at Morgan Stanley in Chicago( paulina. matel @ ms. com).