On the Dash:
- New-vehicle sales are forecast to hold at a 15.6M SAAR in October, flat year over year.
- Average monthly payments are expected to hit an October record of $823 as rates reach 6.81%.
- Incentives rise 13.1% to $3,304 per vehicle while hybrid share climbs to 18.6% of retail sales.
According to a joint forecast from JD Power and GlobalData released on Oct. 22, new-vehicle sales are holding steady, but affordability pressure continues to build for consumers walking into dealerships.
The companies project total new-vehicle sales of 1,327,100 units for the month, a 0.2% increase from October 2025 on a selling-day-adjusted basis, and they expect the seasonally adjusted annualized rate (SAAR) to reach 15.6 million units, flat from a year ago. Without the selling-day adjustment, total sales rise 3.9%.
Retail sales dip on a selling-day-adjusted basis
October has 28 selling days, one more than last year, which shapes how the retail numbers read. JD Power forecasts retail sales at 1,109,500 units, down 1.4% from October 2025 on a selling-day-adjusted basis, but up 2.3% without the adjustment. The agency also expects the retail SAAR to land at 13 million units, down 0.2 million from last year. Meanwhile, the companies project fleet sales at 217,600 units, up 13.1% from a year ago, and consumer spending on new vehicles will rise 3.2% to $49.2 billion, an increase of $1.5 billion.
Affordability pressures show up most clearly in monthly payments. JD Power expects the average monthly finance payment to rise 2.6% to $823, the highest ever for an October, even as it forecasts the ATP to dip 0.1% to $46,329. Interest rates are adding to the strain, as JD Power projects. The average new-vehicle loan rates are projected to climb 19 basis points to 6.81%, the highest October level since 2023 and 28 basis points above August.
Negative equity is also a growing factor. JD Power expects 29.6% of trade-ins to carry negative equity, up 0.6 percentage points from a year ago. Longer loan terms are compounding the problem, with loans of 84 months or longer forecast to make up 13.3% of new-vehicle financing, up 0.9 percentage points, while subprime penetration is projected to reach 11.0%, up 1.5 percentage points.
Incentives climb as hybrids gain share
To offset those pressures, manufacturers are leaning on incentives to keep buyers in the market. Average incentive spending per vehicle is trending toward $3,304, up 13.1% from a year ago and the largest increase in four months, and JD Power expects incentives to reach 6.3% of the manufacturer’s suggested retail price (MSRP), up 0.7 percentage points. Incentive spending on internal combustion engine and hybrid vehicles is forecast to rise 17.5% to $3,142 per unit, while electric vehicle (EV) incentives are moving the other way and JD Power projects them to fall 42.0% to $7,531 per unit from an elevated base last October.
The powertrain mix is also shifting, with hybrids expected to account for 18.6% of retail sales, up 4.0 percentage points. Electric vehicle share is forecast at 6.9%, down 0.3 percentage points, while internal combustion engine share is projected at 72.9%, down 4.3 percentage points. JD Power expects plug-in hybrids to account for 1.3%.
Beyond the U.S., GlobalData forecasts global light-vehicle sales to fall 7.4% year over year in October to 7.7 million units, with weakness in China serving as the main drag. For dealers, the forecast points to a payment-driven month, because higher rates, thinner trade-in equity and longer loan terms are shaping what customers can afford. Rising incentives, however, give dealers more room to work, especially on internal combustion engine and hybrid inventory.
