Cox Automotive recently released several key reports and announcements regarding the state of the U.S. auto market and shifting consumer behavior.
1. Market Outlook: The "Necessity-Driven" Buyer
A survey released in April highlights that high vehicle prices and interest rates are fundamentally changing why people buy cars:
Buying out of Need: 52% of tax-season shoppers are buying purely out of necessity rather than desire.
Planned Purchases: 93% of those using tax refunds for a vehicle had already planned the purchase before filing, suggesting a lack of "impulse" buying in the current economy.
Affordability Gap: While 80% of shoppers prefer new vehicles, many are being forced into the used market or late-model "dependable" inventory due to budget constraints.
2. Sales Forecast: A "Slower Rhythm"
Cox Automotive has maintained its 15.8 million unit forecast for 2026, which represents a 2.6% decline from 2025.
Q1 Performance: Sales in early 2026 outperformed initial pessimistic forecasts but still show a year-over-year decline.
Segment Trends: Midsize SUVs and trucks are seeing growth as buyers "step down" from more expensive full-size luxury models to save money.
EV Reset: Electric vehicle sales fell 27% year-over-year in Q1 following the expiration of certain federal tax incentives. However, Cox notes that hybrids (led by Toyota and Honda) continue to see solid growth.
3. Wholesale & Used Vehicle Trends
According to the Manheim Used Vehicle Value Index (MUVVI) updated in mid-April:
Price Appreciation: Wholesale prices rose 0.9% in the first half of April.
Used EVs: Interestingly, used EV values are showing higher appreciation than gas-powered counterparts as they reach price parity in the used market.
Inventory: Wholesale supply remains tight at roughly 25 days, keeping prices relatively stable despite the broader economic slowdown.
Our take: If someone has a good ride, they are likely holding on to it for a while.
Thanks for reading everybody!
-Paul