ATLANTA -

Dealers are seeing their used-vehicle inventories grow, and for independents in particular, that is helping to create a rosier outlook.

That was one of several findings in the Q4 2019 Cox Automotive Dealer Sentiment Index released Monday, which among other areas, covered the used-car operations of both franchised and independent dealers.

Discussing overall results, Cox Automotive chief economist Jonathan Smoke said in a news release accompanying the study: “The fourth quarter seems to be revealing an important turning point for dealer sentiment, especially compared to this time last year when views of the future dimmed.

 “Independents are more optimistic about the next 90 days, and that improvement is related to increasing used-vehicle inventory,” Smoke said. “Franchises have similar positive views of the future as they did at the end 2018. However, dealers remain concerned about the economy as well as the usual seasonal decline that impacts parts of the country more severely than others.”

Asked what they expect the vehicle market in their respective areas to look like in three months, the overall index for dealers was 51 (out of 100), which was even with the third quarter.

Franchised dealers slid from 57 to 54, while independents climbed from 49 to 51.

This gain for independents was “likely driven by to growing used-vehicle inventory as well as increasing profits,” Cox Automotive said.

“The overall future index score of 51 in Q4 is better than last year and equal to Q3, signaling a better end to 2019 and sustainable opportunities expected in the used-vehicle market,” the company said, citing Smoke.

When asked how they would describe the current used-vehicle sales environment, the index for franchised dealers was 66, down from 73 in the third quarter.

While certainly a big decline, Cox Automotive said this index still points to a “good market,” and that the drop is indicative of seasonal patters as well as new-car incentives/discounts that drives down demand for later-model pre-owned vehicles.

Independents were at 49 when asked about the used-car sales environment, same as Q3.

“Factors influencing a pessimistic view of the current market are the perception of market conditions, competition and credit availability for consumers,” Cox Automotive said of independent dealers.

The overall index on the used-vehicle sales environment was 53, down from 55 in the third quarter.

Meanwhile, when asked about used-vehicle inventory levels, franchised and independent dealers both said they’re seeing it grow.

The index for franchised stores climbed from 54 to 58 in the past quarter, while independents jumped from 44 to 51. The overall index was 53, up from 47 in Q3.

Asked to describe the used-car inventory mix, franchise dealers were at 67 (compared to 65 in Q3), independents were at 63 (up from 62) and the overall reading was 64 (up from 63).

As part of the survey, dealers were asked to list any negative impacts, if any, that tariffs on vehicle and parts imports would have.

Specific to used, 57% said it would lead to higher prices on used vehicles, up from 56% in Q3. Twenty-one percent believe they would lead to lower or delayed used-car sales, compared to 24% last quarter.

In terms of positive impacts specific to used, 43% said the tariffs would lead to more traffic for used vehicles, but that is down from 56% in the last quarter. A third think such tariffs would lead to higher margins on all used vehicles, compared to 36% in Q3.