U.S. auto dealers’ market outlook held steady in Cox Automotive’s latest sentiment survey.

The poll of nearly 900 franchised and independent dealers ticked up one point quarter-over-quarter to 43, meaning more dealers consider the market weak than those who see it as strong. The index has hovered around the same point for two years, Cox said.

More than 40% of polled dealers cited the economy and high interest rates as drags on business, followed by market conditions at 36%. Political climate and tariff concerns fell to 28% and 16%, respectively.

Broken down by type, franchised dealers’ sentiment index actually fell by three points to 53, while independents’ rose two points to 39.

Cox said dealer profitability has fallen since the springtime jump in sales that was in part fueled by shoppers beating tariff-pumped prices. Slowing business has made for “cautious optimism.” Its dealer traffic index fell four points to 33, franchised dealers alone declining from 50 to 43.

“New-vehicle sales have come down from the surge in the spring but have remained relatively strong and better than the past few years,” said Cox Chief Economist Jonathan Smoke in the sentiment report. “While the labor market has softened, unemployment remains historically low, and, for the most part, tariffs have only been a glancing blow to consumer wallets so far. While 2025 has been a roller coaster for many, the market is still generally on track.”

Looking ahead to the fourth quarter, Cox’s dealer outlook index rose one point to 46, still on the weaker side and down from a first-quarter peak of 58. Dealers took a dim view of the cost of doing business, that index holding at a high of 70, indicating pervasive concern over operating expenses.

Dealers indicated they felt more pressure to lower auto prices amid slower business, the pressure index rising four points to 61 for the first increase in a year.

Not surprisingly, dealers' outlook on electric vehicles fell, hitting a record low of 30, the poll found. EV sales have been strong as consumers rushed to lock in federal tax credits that expire Oct. 1, but the end of the breaks will inevitably dent EV demand.

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