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Q4 2025 Cox Automotive Dealer Sentiment Index: A Deepening Caution

The automotive retail landscape is experiencing considerable turbulence, as reflected in the latest Q4 2025 Cox Automotive Dealer Sentiment Index (CADSI). In this quarter, the overall dealer confidence has significantly dipped, marking a worrying trend for both franchised and independent dealers. With both current and future market indices sinking below the positive threshold, dealers are sending a clear message of caution amidst rising economic challenges.

Major Findings from Q4 2025 CADSI

1. Market Sentiment Decline: The current market index has fallen substantially to 38 from 43 in Q3, while future outlook took a similar hit, dropping to 42 from 46. Both results are notably below the pivotal threshold of 50, reflecting widespread concern among auto dealers about conducting business in an uncertain economic environment.

2. Customer Traffic Drops: Overall customer traffic has reached record lows, with a combined score of 31. In terms of in-person visits, the score plummeted to 29, and digital engagement slightly fared better at 40. Particularly alarming were the numbers for franchised dealers who reported in-person and digital traffic at historic lows.

3. Profitability Pressure: Sentiment for profitability also decreased steeply, dropping to 36 overall. Franchised dealers came in with a score of 44, yet independents lagged behind at just 33, a testament to the increasing margin compression due to rising operational costs and softening demand.

4. Challenges in Sales Environment: When asked about new-vehicle sales sentiment, the index indicated a fall to 49, while that for used-vehicles was observed at 42. Notably, franchised dealers reported sentiment at 49 for new vehicles, yet independent dealers encountered more challenging circumstances, particularly with used vehicles dropping to a meager 39.

5. Inventory Perspectives: On a slightly positive note, new-vehicle inventory increased marginally, resulting in a score of 59, while overall used inventory remained tightly constrained at 43. Franchised dealers saw their new-vehicle stock grow, but independents continued struggling with limited available inventory.

6. Economic Sentiment Erosion: The economy index fell to 39 from the previous quarter's 43, highlighting worries concerning macroeconomic conditions. While franchised dealers reported a decline to 44, independents expressed a more pronounced concern, reflected in a drop to 37.

7. EV Outlook Weakens: A particularly important segment, the outlook for electric vehicles (EV), has deteriorated significantly. Franchised dealers expressed a stark future sales sentiment score of only 24 and leasing sentiment at 27, indicating a drastic decline likely influenced by the expiration of crucial tax credits. Independents maintained lower engagement with EVs as well, reflecting ongoing subdued optimism.

Summation

As 2025 draws to a close, the automotive market is experiencing a palpable slowdown, a stark contrast to the temporary optimism observed early in the year due to tariff actions and EV sales spikes. With rising costs and slumping consumer engagement weighing heavily on dealers, the Q4 signals a hesitant outlook. However, if consumer confidence can rebound and interest rates ease, there remains potential for market momentum to recover in the first half of 2026.

Methodology

The Q4 2025 CADSI results stem from a survey of 919 dealers, comprising 492 franchised and 427 independents, conducted from late October to early November 2025. The index measures dealer perceptions of current sales conditions and three-month sales expectations, categorized as strong, average, or weak. Education plays a key role in understanding the shifts revealed by this index, providing valuable insights into the dealer community's sentiments.

To read the comprehensive analysis, download the complete results from Cox Automotive.

About Cox Automotive

Cox Automotive stands as the largest provider of automotive services and technology globally. With a robust dataset that encompasses over 2.3 billion online interactions each year, the company delivers tailored solutions across various sectors in the automotive industry. With over 29,000 professionals worldwide, they encompass a portfolio of recognized brands like Autotrader®, Kelley Blue Book®, and Manheim® among others. For more information, visit Cox Automotive.