On the Dash:
- Dealers are entering spring with cautious optimism, expecting stronger demand despite ongoing traffic and profitability pressures.
- New-vehicle sales sentiment remains weak, signaling continued challenges for inventory management and pricing strategies.
- EV sales outlook is at record lows, suggesting dealers should carefully plan for EV inventory and incentives.
According to the Q1 2026 Cox Automotive Dealer Sentiment Index (CADSI), dealer optimism is showing a seasonal rebound as expectations for the spring selling season improve, even though current market conditions remain below historical norms.
The index rose to 41 from 38, reflecting a modest improvement in overall market sentiment, while franchised dealers reported a current market score of 48, signaling continued caution among the typically more optimistic group.
Looking ahead, expectations for the next three months jumped sharply to 56 from 42 in Q4, reflecting a typical seasonal lift and growing hope for a stronger spring selling season.
Despite the improved outlook, dealers continue to face pressure on traffic and profitability. Customer traffic fell to 28, matching levels seen during pandemic-era lows in Q2 2020 (13) and Q1 2021 (28). Profitability also declined four points to 32, remaining well below historical norms. New-vehicle sales sentiment softened to 48, while used-vehicle sales showed modest improvement, led by franchised dealers. The new-vehicle sales index has remained below 50 for two consecutive quarters, a first since the survey began in 2017.
Inventory conditions showed mixed trends, with new-vehicle inventory growth slowing to 56 and used-vehicle inventory remaining tight at 45, keeping price pressure in place. Dealer sentiment toward EV sales fell to a record low of 33, with franchised dealers dropping to 25 from 51 a year ago. Expectations for EV sales remain subdued at 28 overall, with franchised dealers slightly higher at 30.
Importantly, the CADSI is derived from a quarterly survey of 1,031 U.S. auto dealers, including 532 franchised and 499 independent. Conducted Jan. 28–Feb. 10, responses were weighted by dealership type and sales volume.
Despite ongoing headwinds, dealers are entering the spring selling season with cautious optimism, expecting conditions to stabilize and improve in the months ahead, even as economic uncertainty and affordability challenges persist.
