Auto Market Weekly Summary

Key Highlights:

• The new-vehicle sales pace declined slightly in April but remained up substantially year over year as buyers were motivated to buy ahead of tariff-related increases to prices.
• The used market saw month-over-month declines in sales volume but gains year over year. Used-vehicle prices increased.
• The Fed left interest rate policy unchanged as it waits to see evidence of inflation and labor market deterioration from tariffs.

New-Vehicle Sales and Prices

The new-vehicle seasonally adjusted annual rate (SAAR), or sales pace, declined slightly in April but remained up substantially year over year as buyers were motivated to buy ahead of tariff-related increases to prices.

• The April SAAR decreased by 3.1% to 17.3 million, which was up 7.8% from last year’s 16.0 million but down from March’s 17.8 million.
• April’s strength was driven by retail sales, with fleet sales showing weak gains.
• The average transaction price of a new vehicle in April increased by 2.5% from March to $48,699, which was up 1.1% year over year.
• The average price relative to the average manufacturer’s suggested retail price (MSRP) was steady at 96.1%, so discounting did not change.
• The average MSRP also increased 2.5% month over month but was up 1.9% year over year.
• Manufacturer incentives declined by 2.1% month over month to $3,278, which was up 6.7% year over year.

Used-Vehicle Market

The used market also saw month-over-month declines but gains year over year. Used prices increased.

• Retail sales volumes decreased by 1.7% in April compared to March, but they were up 13% year over year.
• Certified pre-owned (CPO) sales declined by 7% month over month but were up 11.8% year over year.
• Wholesale vehicle values increased by 2.7% in April on a seasonally adjusted basis, with the Manheim Used Vehicle Value Index rising to 208.2, which was up 4.9% from a year ago.
• As of April 25, $265.7 billion in tax refunds had been issued, which was up 2% year over year, with the average refund being $2,945, up 3% year over year.

Federal Reserve and Interest Rates

The Fed left interest rate policy unchanged as it waits to see evidence of inflation and labor market deterioration from tariffs.

• The Federal Reserve is focused on price stability and full employment, with its hands tied due to expected tariff-driven inflation.
• While they wait to see evidence of inflation moving up, the labor market remains strong, even though labor market conditions are expected to deteriorate because of tariffs.
• The path for rates is uncertain, and uncertainty doesn’t help consumers make plans for finance-sensitive purchases like vehicles.
• The biggest change in auto loan rates over the last two months has been a direct response to tariffs, leading to tighter supply and higher prices in the new vehicle market.
• Manufacturers have been spending less on attractive rate offers as a result. Since February, incentives are down; vehicle prices are up.
• New auto loan rates increased by 10 basis points since February, just 26 basis points below a 25-year high reached last June.
• Used auto loan rates declined by 64 basis points since February, averaging just over 14.1% last week.

Jonathan Smoke

Chief Economist

Jonathan Smoke leads Cox Automotive’s economic and industry insights team, which tracks key metrics and trends impacting both the wholesale and retail markets for vehicles informed by the proprietary data from the company’s businesses and platforms. For 28 years, Smoke has focused on translating data and trends into relevant actionable insights for the industries that represent the biggest purchases that consumers make in their lifetimes: real estate and automotive. Smoke joined Cox Automotive in 2017.