On the Dash:
- U.S. new-vehicle sales are projected to fall 2.4% in 2026 after a stronger-than-expected 2025.
- Consumer demand will diverge, with higher-income buyers supporting sales while affordability pressures limit lower-income participation.
- Policy uncertainty, labor market weakness and shifting EV dynamics will continue to shape dealer strategies and market performance.
Cox Automotive projects U.S. new-vehicle sales will reach 15.8 million units in 2026, a 2.4% decline from 2025, as market fragmentation slows industry growth. The forecast was released as part of the company’s 2026 automotive industry outlook and reflects expectations for modest pullbacks across most sales metrics following a stronger-than-anticipated 2025.
Despite the decline, the outlook is stable. The company expects easing interest rates and stronger tax returns to provide near-term support for vehicle demand, particularly in the first half of 2026. However, broader economic crosscurrents are expected to limit overall growth.
The forecast highlights a widening divide among consumers. Higher-income households are positioned to benefit from wealth gains, tax relief and lower borrowing costs, which should support new-vehicle sales. At the same time, lower-income consumers continue to face affordability pressures due to persistent inflation and higher vehicle prices. This divergence is expected to accelerate trade-down behavior and place greater emphasis on value across both new and used markets.
Labor market conditions also factor into the outlook. Cox Automotive points to a developing jobless expansion, where economic growth is driven by productivity and investment rather than job creation. Sluggish employment growth is expected to weigh on household confidence and big-ticket purchases, even as stock market gains provide some offset.
Policy uncertainty remains another challenge. Tariffs, fuel economy rules and potential tax-code changes are expected to create volatility, with renegotiation of the USMCA trade agreement likely to be a focal point in 2026. The electric vehicle market is also entering a new phase, as federal incentives fade and off-lease EVs enter the used market.
Artificial intelligence is reaching an inflection point. AI investments are improving efficiency and transparency across retail operations, though uneven adoption could widen performance gaps among dealers.
Retail new-vehicle sales are forecast to decline 1.5% year over year in 2026, while fleet sales are expected to drop 6.1%. Leasing penetration is projected to fall to 21%, and wholesale used-vehicle values are expected to rise modestly by year’s end.
