January new-vehicle sales cool after strong 2025 finish

On the Dash:

• January new-vehicle sales are projected to slow to a 15.3 million SAAR, down from December and last year.
• Year-over-year gains are driven by an extra selling day, while month-over-month volume fell sharply.
• Tax refunds may provide a short-term boost to demand, but 2026 sales are expected to trail 2025 levels.

After a strong finish to 2025, the U.S. auto market is showing early signs of slowing as 2026 begins. January new-vehicle sales are expected to cool compared with both December and last year, according to Cox Automotive’s latest forecast. The January SAAR is projected to finish near 15.3 million, down from 15.5 million a year ago and December’s 16.1 million pace.

The slowdown aligns with historical post-holiday demand trends, though broader economic uncertainty, rising vehicle prices and external disruptions are also expected to influence the new-vehicle market throughout 2026.

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January sales are expected to reach approximately 1.14 million units. Year over year volume is projected to rise 3.2%, largely due to one additional selling day compared with last year. Month over month sales, however, are forecast to decline 23.5%, a typical seasonal pullback. Widespread severe winter weather also disrupted dealership traffic during the final weekend of January, likely delaying some purchases.

Looking ahead, tax season could spark a temporary lift in demand. New tax breaks enacted under the One Big Beautiful Bill Act are expected to generate higher-than-usual refunds, increasing disposable income for some buyers. Consumers who delayed purchases last year may return to the market in late first quarter or early second quarter.

Despite the retail automotive industry outperforming expectations in 2025 at 16.3 million units, Cox Automotive forecasts the 2026 sales pace will settle near a 15.8 million SAAR. Stalling economic growth, slowing job creation and the absence of federal EV tax incentives are expected to continue weighing on consumer demand.