January new-vehicle sales are expected to start the year at a slower pace than last year and last month, according to Cox Automotive’s forecast.
The January seasonally adjusted annual rate of sales (SAAR) is forecasted to finish near 15.3 million, down slightly from last year’s 15.5 million pace and down from December’s upwardly revised 16.1 million level. After a strong third quarter, the automotive market slowed notably – a pace that has carried over into the new year.
New-vehicle sales volume is expected to increase by 3.2% over last year, although the year-over-year gain is largely due to one additional selling day in 2026 and does not reflect a stronger market than one year ago. Compared to December, new-vehicle sales volume is forecast to be lower by 23.5%. A month-over-month decline, however, is typical in January.
“The new-vehicle sales pace always slows in January after the holiday shopping season, and this year is no exception,” said Charlie Chesbrough, senior economist at Cox Automotive. “Sales slowed in the fourth quarter of last year, and that trend is expected to continue into the start of 2026. The loss of EV tax credits at the end of Q3 led to fewer overall sales in Q4, and that will likely continue into the first quarter of 2026. Also, the market is slowing due to ongoing concerns about the U.S. economy and persistently high new-vehicle prices. These market conditions are expected to be major headwinds for the new market throughout 2026.”
This month’s severe winter weather – Winter Storm Fern – disrupted conditions across much of the nation in the final weekend of January and will likely slow sales as consumers postpone shopping and dealerships face reduced traffic. Even so, some relief may be ahead as tax refunds begin hitting households. With the One Big Beautiful Bill passed in July 2025 expected to generate higher-than-usual refunds, many consumers may see a temporary boost in disposable income.
According to Chesbrough, “Tax season may offer a small but meaningful bump for the auto industry. With larger refunds expected some consumers who held off earlier in the year may finally have the means – and the confidence – to return to the market.”
