Cox Automotive Q2 2025 Dealer Sentiment Index Reveals Market Momentum Amid Tariff Concerns

ATLANTA, May 21, 2025 – The latest Cox Automotive Dealer Sentiment Index (CADSI) reveals a complex landscape for U.S. auto dealers, with franchised dealers buoyed by recent sales momentum while concerns about tariffs and political uncertainty cloud the outlook for the months ahead.

The Q2 2025 CADSI, based on a national survey of 977 franchised and independent dealers conducted from April 22 to May 5, shows the current market index at 42, down slightly from 44 in Q1, indicating that more dealers perceive the market as weak rather than strong. Franchised dealers reported improved conditions, however, with a score of 56, up from 54 in Q1. Independent dealers remained cautious with a declining score of 37. The results of the latest survey consistently suggest that franchised dealers, which sell both new and used vehicles, are more positive about market conditions than independent dealers, businesses that transact only in used vehicles.

“Dealers have a front-line view of the U.S. auto market, which appears to be at an inflection point,” said Jonathan Smoke, Chief Economist at Cox Automotive. “The recent sales pace has been a positive, lifting current market sentiment higher for franchised dealers. But as we’ve said before, 2025 is going to be a roller coaster for this industry, and the market could be a lot more hair-raising in the months ahead.”

Key Findings from Q2 2025 CADSI

• Market Outlook Drops Sharply: After two quarters of improvement, the market outlook index fell from 58 to 45, indicating that more dealers expect weak conditions in the next three months. Independent dealers saw the steepest decline, dropping 15 points to 42, while franchised dealers also lowered expectations, falling to 56 from 61 in Q1.
• Customer Traffic Surges: The customer traffic index rose to 37, up from 33 in Q1 and higher than year-ago levels. Franchised dealers reported a 10-point jump in in-person visits – the largest increase since the metric was introduced in Q3 2022 – reflecting strong consumer engagement amid new tariff policies.
• Profitability Improves: The profit index climbed to 39, the highest in over a year. Franchised dealers led the gains, rising from 41 to 52, with more dealers now viewing their profits as strong rather than weak. Independent dealers also saw modest improvement, up three points to 35.
• Inventory Tightens: Strong vehicle sales in March and April led to tighter inventory levels. The new-vehicle inventory index dropped to 50, the lowest since late 2022, while used-vehicle inventory fell to 41. Dealers also reported reduced pressure to lower prices as inventory declined, with the price pressure index falling from 63 to 57.
• Electric Vehicle (EV) Sentiment Slips Despite Tax Credit Optimism: The EV sales index declined to 44, with future expectations falling to 37 – the lowest score since the question was introduced in 2021. However, the EV tax credit index reached a record high of 62, indicating continued belief in its positive market impact.
• Tariffs and Politics Emerge as Top Concerns: According to the Q2 2025 Cox Automotive Dealer Sentiment Index, the U.S. Economy – mentioned by 51% of all dealers – is the top factor holding back business, moving back above Interest Rates (42%). Political Climate and Tariffs on Imported Vehicles and Parts both jumped significantly in the latest survey, moving to No. 4 and No. 5, respectively. Market Conditions was No. 3.

Cox Automotive Dealer Sentiment Index Methodology

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 Q2 2025 CADSI is based on responses from 977 dealers, including 496 franchised and 481 independent dealers.

The survey, conducted from April 22 to May 5, 2025, measures dealer perceptions of current retail auto sales and sales expectations for the next three months as “strong,” “average,” or “weak.” Responses are weighted by dealership type and sales volume to represent the national dealer population. Indices are calculated by assigning values to responses: 100 for strong/increasing, 50 for average/stable, and 0 for weak/decreasing. Respondents who select “don’t know” are excluded from the index calculation. The reported metrics have a margin of error of +/- 3.14%.

About Cox Automotive
Cox Automotive is the world’s largest automotive services and technology provider. Fueled by the largest breadth of first-party data fed by 2.3 billion online interactions a year, Cox Automotive tailors leading solutions for car shoppers, auto manufacturers, dealers, lenders and fleets. The company has 29,000+ employees on five continents and a portfolio of industry-leading brands that include Autotrader®, Kelley Blue Book®, Manheim®, vAuto®, Dealertrack®, NextGear Capital™, CentralDispatch® and FleetNet America®. Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately owned, Atlanta-based company with $23 billion in annual revenue. Visit coxautoinc.com or connect via @CoxAutomotive on X, CoxAutoInc on Facebook or Cox-Automotive-Inc on LinkedIn.

Media Contacts:
Mark Schirmer                                                                                                             
734 883 6346
mark.schirmer@coxautoinc.com                      

Dara Hailes      
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dara.hailes@coxautoinc.com