Two different industry surveys found dealers expressing some apprehension about the current market, with slower customer traffic and economic forces impacting business. Cox Automotive released its Q2 Dealer Sentiment Tuesday, which followed Stephens’ Mid-May Auto Dealer Survey made public last week.
Middle of the road: Cox Automotive and Stephens just reported middling sentiment from dealers.
With 958 dealers surveyed by Cox, the current market sentiment in Q2 was at a 43 on its index, a slight increase from the 41 at the end of Q1.
Franchise dealers were at 53 and independents 40.
Dealers reported an uptick in traffic in the past three months, with the sentiment jumping from 28 in Q1 to 36.
In-person traffic lagged behind online traffic.
In all measures, the franchise dealers expressed more optimism than the independent dealers.
“Right now, it really comes down to customer mix and the tools dealers have to manage through an affordability-constrained market,” said Erin Keating, Executive Analyst and Senior Director of Economic and Industry Insights at Cox Automotive.
“Independents are serving a much more payment-sensitive, often subprime buyer, and the consistent message in verbatims is that the customer is essentially tapped out. At the same time, credit is tightening, insurance costs are climbing, and negative equity is harder to work through, so the deal just breaks more often…Franchise dealers are facing the same macro pressures, but they have more ways to keep transactions together, which is why their sentiment is holding up better.”
Adding to this sentiment: Stephens surveyed 100-plus franchise dealers, with 18% saying traffic was worse than expectations in May.
For new car sales, 66% said May was in the middle compared to the other five months of 2026, and 43%, the largest percentage, expressed the same for used sales.
“It was middle of the road compared to the other four months, which were very volatile, especially in the northeast and southeast,” said Jeff Lick, a Stephens analyst.
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On inventory: Franchise dealers had no change in their description of their new vehicle inventory mix in the Cox survey.
While franchise dealers saw no change in their view on the used vehicle inventory, independent dealers reported a near double-digit decline.
The majority of dealers stated they were under pressure to lower prices.
Economic impact: The top factor holding businesses back was the economy, according to 55% of dealers in the Cox survey.
There was a 5% increase in the number of dealers, pointing to the political climate.
Stephens asked dealers about how the Iran war has affected their business, with 41% pointing to the higher fuel costs and lower customer traffic.
“The initial responses were weighted more on the higher costs, and then there were more responses about the traffic issues,” Lick said.
Fixed ops: Franchise dealers expressed a growing optimism about their fixed operations in the Cox survey.
Stephens asked about the biggest concern in fixed ops, and 61% of dealers stated it was technician availability.
Also worth noting: The Stephens survey showed the hottest brand in the dealership group was Toyota/Lexus at 44%. The brand performing the weakest was Stellantis, 32% of dealers stated.
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