Automakers are expected to share that new vehicle sales fell between 3.4 percent and 3.8 percent as dealers battled tough winter weather and rising prices.
Analysts from Cox Automotive and JD Power & Associates agree that this February won’t be as successful as last February, but maintained optimism about the market for new cars, trucks, and SUVs as the year goes on.
“The February sales pace shows a modest improvement over January, but will be down from a year ago, with retail sales projected to decline 4.6%,” said Thomas King, president of OEM solutions at JD Power, in a release. “As in January, performance is being shaped by depressed electric vehicle (EV) retail demand — EVs are expected to account for just 6.6% of retail sales, down 1.8 percentage points from a year ago — while elevated transaction prices continue to weigh on volumes through ongoing affordability pressure.
“Despite the relatively slow start to the year, acceleration in the sales pace is expected over the balance of 2026, starting with March, which is traditionally a high-volume sales month with elevated promotional activity from manufacturers.”
Cox Senior Economist Charlie Chesbrough didn’t offer as much optimism saying he expected “major headwinds for the new vehicle market” the rest of the year. But he did believe the next few months would be a bright spot.
“(W)e may see some strengthening in the coming months as tax refunds are distributed across the country. The Big Beautiful Bill passed in July of last year is expected to result in higher refunds this year, so this could provide a minor, short-term boost to vehicle sales in the coming months,” he said in a release.
Buyers can expect to pay a bit more for the vehicles they want, as JD Power predicts the average retail transaction price will rise 2.7 percent, and 3 percent if the purchased vehicle isn’t an EV. Power’s analysts predicted the average will be $46,303.
Prices will rise despite the efforts by automakers to entice buyers into showrooms, as the average incentives offered on a vehicle is expected to rise $63 from year-ago numbers to $3,293. Discounts on EVs are expected to average $10,356 in February, down $1,664 compared with February 2025. Meanwhile, discounts on non-EVs are projected at $3,085, an increase of $346 from last year.
“Affordability pressure remains significant, with the average monthly finance payment reaching $811, up $32 from a year ago. In response, more consumers are turning to 84-month loan terms, which are expected to account for 12.7% of financed sales this month compared to 7.7% a year ago,” King said.
“Easing interest rates and strong used-vehicle values are providing some relief to buyers facing elevated monthly payments. The average interest rate for new-vehicle loans in February is 6.72%, a decrease of 31 basis points from a year ago.”
[Images: Shutterstock, Toyota, Tesla, Audi]
