The Q4 Cox Automotive Dealer Sentiment Index (CADSI) reveals a significant decline in dealer confidence as economic and market challenges persist. Market sentiment for both current and future conditions fell below the positive threshold in the fourth quarter, signaling caution as dealers face rising costs, higher prices and economic uncertainty, all contributing to weaker demand.
“Dealers are signaling caution as 2025 ends,” said Mark Strand, deputy chief economist at Cox Automotive. “Persistent economic uncertainty and fading consumer confidence are weighing on sentiment. Compared to the rest of the year, the current market feels like it’s running out of gas. As we look ahead at 2026, renewed market momentum is entirely possible, especially if we get material interest-rate relief and a rebound in consumer confidence.”
The current market index fell to 38 (from 43 in Q3), and future outlook declined to 42 (from 46), both well below the positive threshold of 50. Franchised dealers reported a current market index of 47, notably higher than independents at 35, but both groups saw declines and remain below the positive threshold, reflecting widespread caution.
Overall traffic dropped to 31, with in-person traffic at 29 and digital at 40. The decline in customer traffic was especially pronounced for franchised dealers, with in-person and digital traffic both reaching all-time lows, while independent dealers also saw weak but less severe declines.
Profit sentiment declined to 36 overall, with franchised dealers at 44 and independents at 33, reflecting margin compression from rising costs and softer demand. The profitability gap between franchised and independent dealers persisted, with independents experiencing a more pronounced impact.
New-vehicle inventory increased slightly to 59, while overall used inventory remains tight at 43. Franchised dealers view their new-vehicle inventory as growing (59), while independent dealers continued to face tight used inventory (41), limiting their ability to meet demand.
The economy index dropped to 39 from 43 in Q3, reinforcing concerns about macro headwinds. Both franchised (44) and independent dealers (37) saw economic sentiment decline, but independents expressed greater concern about macroeconomic headwinds.
The Cox Automotive Dealer Sentiment Index (CADSI) is derived from a quarterly survey issued to a representative sample of franchised and independent auto dealers across the United States. The Q4 2025 CADSI is based on responses from 919 dealers, including 492 franchised and 427 independent dealers.
