Cox Automotive has released a new forecast suggesting that new vehicle sales in the United States are expected to experience a slight decline in 2026. The prediction indicates that sales will total around 15.8 million, reflecting a 2.4% decrease from the previous year, which had exceeded industry expectations. The forecast also anticipates a 1.5% decline in retail sales and a more significant 6.1% dip in fleet sales compared to 2025.
In terms of used vehicle sales, Cox projects a modest year-over-year decrease, driven by ongoing affordability challenges, which may push consumers towards less expensive options. Additionally, lease penetration for electric and plug-in hybrid vehicles is expected to drop by three percentage points compared to the previous year.
Jeremy Robb, the interim chief economist at Cox Automotive, acknowledged that although the outlook for 2026 indicates a slowing automotive market, it remains relatively positive. He noted, “Our 2026 forecast reflects a slowing market, but still a good one.” Robb emphasized that while most sales metrics are predicted to be lower compared to 2025, the declines are modest, with expectations for favorable news regarding interest rates and tax returns potentially benefiting the auto market in the first half of 2026.
The report outlines complex economic dynamics at play in the auto industry in 2026. It points to “bifurcated consumer dynamics,” where higher-income households might benefit from rising financial markets, tax relief, and interest rate cuts, encouraging new vehicle purchases. Conversely, lower-income consumers are likely to confront the pressures of persistent inflation and high costs for both new and used vehicles, which could drive a shift towards more affordable options.
Although inflation appears to be moderating, and potential interest rate cuts by the Federal Reserve could enhance household wealth, there remains uncertainty regarding Federal Reserve leadership and its independence, which could lead to volatility that hampers housing recovery and restricts auto sales growth.
Cox Automotive’s analysis highlights a unique “jobless expansion” in the U.S. economy, where GDP increases due to investment and productivity gains occur alongside stagnation in the labor market. This slow job growth is expected to suppress household formation and reduce confidence in making significant purchases, such as vehicles. However, gains in the stock market might serve as a counterbalance, potentially benefiting the auto industry.
The forecast also touches on historical policy changes from the previous administration that continue to shape the automotive landscape, particularly concerning electric vehicles. Despite the challenges ahead, the outlook remains cautiously optimistic, suggesting that underlying economic factors could create opportunities for the auto market in the near future.