The Q3 2026 Cox Automotive Dealer Sentiment Index (CADSI) reveals that U.S. automobile dealers are navigating a challenging market shaped by economic uncertainty and affordability concerns. Here are the key findings and insights:
Dealer Confidence
- Confidence among dealers remains under pressure, with a notable shift toward value and affordability as consumers become more selective.
- Dealers report signs of stability in inventory and profitability, indicating the market is adjusting rather than declining.
Sentiment Trends
- Sentiment decreased this quarter across several key measures:
- Current Market Sentiment: Decreased to 41 (down from 48).
- Future Market Sentiment: Decreased to 46 (down from 49).
- Dealer traffic and sales have also softened, with franchised dealers observing the sharpest downturns.
Key Market Metrics
| Metric | Q3 Score | Trend | Long-term Score |
|---|---|---|---|
| Current Market | 41 | Declining | 48 |
| Future Market | 46 | Declining | 49 |
| Customer Traffic | 34 | Declining | 38 |
| Profit | 39 | Improving | 43 |
| Costs | 71 | Improving | 69 |
Sales Performance
- New-vehicle sales saw a marked decline, while used-vehicle sales remained relatively stable, with an increasing demand for affordable options.
- New-Vehicle Sales Score: 50 (declined from 55).
Inventory Dynamics
- Inventory levels are stabilizing, improving supply conditions:
- New-Vehicle Inventory Score: 54 (remained stable).
- Used-Vehicle Inventory Score: 43 (improved).
Economic Concerns
- The economy remains the principal concern for dealers, followed by market conditions and interest rates.
- Interest rates have gained prominence, reflecting the impact of rising borrowing costs on consumer purchasing habits.
Notable Quotes
- A Toyota dealer noted, “Highest interest rates in a long time… people are holding on to cars longer.”
- A Honda dealer stated, “Gas costs, war, inflation… have impacted business.”
Conclusion
Dealers are facing an increasingly selective consumer market amid economic pressures. While some measures of profitability and inventory are stabilizing, adapting to a landscape where affordability is key will be essential for sustaining success.
