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Survey: Car Dealers Worried Long-Term

Survey: Car Dealers Worried Long-Term

Posted on May 22, 2025 By rehan.rafique No Comments on Survey: Car Dealers Worried Long-Term

Survey: Car Dealers Worried Long-Term

Car dealers may have had a very good last two months, but they’re worried about the future. A major survey of dealer attitudes finds the majority more pessimistic about their business than they were in the first quarter of the year.

Why You Should Care

Kelley Blue Book’s parent company, Cox Automotive, surveys dealers quarterly about their perspective on their industry. The results can be helpful for shoppers when gauging when to buy and how to negotiate. If you know the dealer across the table expects to sell every car with ease, you have limited negotiating power. If you know they’re nervous about their future, you may have more room to haggle.

Cox Automotive interviewed 977 dealerships for its second-quarter survey: 496 associated with a larger franchise and 481 independent.

Researchers convert dealer answers into numerical values. A score of 50 is neutral. Scores above 50 indicate optimism, and scores below 50 show doubts.

The First Results With Tariffs in Mind

Cox Automotive conducts the survey quarterly. The previous version, released in March, found dealers slightly worried before the White House enacted significant tariffs on new cars and car parts.

Researchers conducted this survey between April 22 and May 5.

These results came after dealers had had a little time to see how tariffs impact their work. Many enjoyed brisk sales in March and slightly-above-average sales in April, as Americans rushed to buy cars imported at pre-tariff prices.

But they’ve watched those numbers trail off, and prices start to rise, in recent weeks.

Market Outlook Falls Off a Cliff

Dealers’ feelings about the current market were down modestly, scoring 42 for the second quarter after a score of 44 in the first.

But their expectations for the next three months fell markedly, from 58 in the first quarter to just 45 in the second. Independent dealers who run a single dealership felt even worse. Their outlook dropped 15 points to 42.

Franchised dealers, who enjoy the support of a larger organization plotting strategy, saw their expectations fall from 61 to 56.

Franchised dealers reported high foot traffic in recent weeks, with a 10-point jump in in-person visits since last quarter.

But that has helped drain their inventory.

The new vehicle inventory index dropped to 50, the lowest since late 2022, while used-vehicle inventory fell to 41. Dealers also reported reduced pressure to lower prices as inventory declined, with the price pressure index falling from 63 to 57.

Tariffs, Politics Join Top Concerns

Fifty-one percent of dealers cited the economy as the top factor holding back business. Interest rates came in second.

Related: Fed, Car Shoppers All Holding Their Breath

Market conditions came in third, with the political climate and tariffs also placing in the top five worries.

Automobile

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