U.S. Auto Dealers Maintain Steady Outlook in Q3 2025 Despite Slowing Traffic and Profit Pressures
In Q3 2025, U.S. auto dealers reported steady but cautious sentiment despite slowing traffic and weakening profitability, according to the Cox Automotive Dealer Sentiment Index (CADSI). The overall market index stood at 43, up slightly from Q2 but still below the neutral 50 threshold, signaling more dealers view the market as weak than strong. Franchised dealers reported stronger confidence (53) than independents (39), though both groups face ongoing cost pressures and softer customer demand.
Key findings highlighted mixed conditions across the industry. Customer traffic declined sharply after Q2’s surge, profitability slipped as operating expenses remained elevated, and price pressures intensified amid rising inventories. New-vehicle inventory rebounded to its highest level of the year, while the sales environment index dipped slightly. Dealer expectations for the EV market fell to a record low as federal tax credits approached expiration. Still, the outlook for the next three months improved modestly, interest rate and tariff concerns eased, and unemployment remained low—factors that support a measured sense of resilience in an otherwise challenging market.
Canadian Auto Market Slows as Economic Contraction and Trade Uncertainty Weigh on Sales
In Q2, Statistics Canada reported a sharper-than-expected economic downturn, with GDP contracting at a -1.6% annual rate as tariffs and trade uncertainty weighed heavily. Exports fell 7.5% and business investment slipped 0.6%, though household spending rose, driven in part by stronger automotive sales. Economists caution, however, that consumer demand may not be sustainable given the broader economic headwinds.
Canadian Used Vehicle Market Faces Broad Declines Amid Economic Headwinds – August 2025 Update
In August 2025, the Canadian used wholesale market continued its downward adjustment, with prices falling nearly 1% across the month. Cars and trucks both declined around 0.9%, though performance varied by category. Mid-Size Cars, Sub-Compact Cars, Sporty Cars, and Prestige Luxury models saw the steepest losses, while Compact and Luxury Cars registered smaller dips and Full-Size Cars posted modest gains. On the truck and SUV side, Sub-Compact Crossovers, Full-Size Pickups, Compact Vans, and Full-Size Vans recorded the sharpest declines, though Small Pickups and Compact Vans occasionally provided stability. Auction sale rates fluctuated widely, averaging 38–43%, as sellers held firm on pricing amid economic uncertainty, while upstream channels continued to secure frontline-ready vehicles before they reached auctions. Retail pricing softened only slightly, with the national average listing price easing from $37,700 to $37,500.