Dealers are cautiously optimistic as they gear up for the spring selling season, despite ongoing market challenges. The Q1 2026 Cox Automotive Dealer Sentiment Index (CADSI) reveals a seasonal boost in dealer confidence, driven by improved expectations for the upcoming months. While current market conditions remain below historical averages, dealers are looking ahead with hope, anticipating stronger demand and a potential turnaround.
Mark Strand, deputy chief economist at Cox Automotive, highlights the typical 'spring bounce' in dealer sentiment. He emphasizes the need for relief from high interest rates and a boost in consumer confidence to sustain this optimism.
Key Insights from the Q1 2026 CADSI:
- Market sentiment has improved slightly, but remains weak, with a score of 41 (up from 38). Franchised dealers, known for their optimism, reported a current market index of 48, indicating continued caution.
- Outlook for the next three months has rebounded sharply to 56 (from 42 in Q4), reflecting a seasonal uplift and cautious optimism for spring sales.
- Customer traffic and profitability continue to face pressure, with overall traffic hitting a low of 28, similar to pandemic-era levels in 2020 and 2021. The profit index fell to 32 in Q1, well below historical norms.
- The sales environment is mixed, with new-vehicle sales sentiment softening to 48, while used-vehicle sales showed modest improvement, led by franchised dealers.
- Inventory levels have stabilized, but pricing pressure persists, with new-vehicle inventory growth slowing to 56 and used-vehicle inventory remaining tight at 45.
- Dealer sentiment towards electric vehicle (EV) sales has hit a record low of 33, following the expiration of key incentives. Franchised dealers saw the steepest decline, with expectations for EV sales remaining subdued at 28.
Despite these challenges, dealers are entering the spring season with a positive outlook. Improved outlook scores suggest a belief in stabilization and improvement in the coming months, even amidst economic uncertainties and affordability issues.
The Cox Automotive Dealer Sentiment Index is derived from a quarterly survey of a representative sample of franchised and independent auto dealers across the US. The Q1 2026 CADSI is based on responses from 1,031 dealers, including 532 franchised and 499 independent dealers. The survey was conducted from January 28 to February 10, 2026, with responses weighted by dealership type and sales volume. Index scores are assigned values of 100 for strong/increasing, 50 for average/stable, and 0 for weak/decreasing, with a margin of error of ±3.23%.
Cox Automotive, the world's largest automotive services and technology provider, is fueled by extensive first-party data and tailored solutions for various stakeholders in the automotive industry. The company has been recognized on Glassdoor's Best Companies in Tech & AI and Best Place to Work lists for 2026.
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