Cox Automotive Auto Market Report: May 13

Cox Automotive’s Auto Market Report video delivers a comprehensive analysis of the current automotive market. Chief Economist Jonathan Smoke leads our effort to translate data and trends into actionable insights. This video covers a wide range of topics, including consumer spending patterns, consumer sentiment, retail vehicle sales, financing rates, supply dynamics, pricing trends and leading indicators from Cox Automotive’s extensive data ecosystem.

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Report Summary – May 13, 2025

Key Highlights:

• Consumer spending shows the strongest year-over-year growth since early January.
• Retail vehicle sales peaked in late April, despite recent declines.
• New and used vehicle supply remains tight but appears to have bottomed out.

Consumer Spending Growth Accelerated in April

Consumer spending has shown remarkable growth, marking the strongest year-over-year increase since early January.

• The Bloomberg second measure of U.S. consumer spending indicates a significant uptick.
• This growth is a positive indicator for the overall economy and suggests increased consumer confidence.

Consumer Sentiment Trending Higher in May

Despite a decline in consumer sentiment through April, May has seen a 2.7% increase.

• The Morning Consult Index of Consumer Sentiment shows an upward trend, reflecting improved consumer outlook.
• This increase in sentiment is crucial as it often correlates with higher spending and economic activity.

Retail Vehicle Sales Peaked in Late April

Retail vehicle sales for both new and used markets peaked in late April, although recent weeks have seen a decline.

• Sales trends for new and used vehicles remain higher than last year, indicating robust demand.
• The peak in sales suggests that consumers were eager to purchase vehicles before potential price increases due to tariffs.

Low APR Financing

Low-interest rate deals have decreased by over 7 percentage points year-over-year, with 0% interest loans also seeing a decline.

• The reduction in low APR financing options has made vehicle financing more expensive for consumers.
• This trend could impact future vehicle sales as higher financing costs may deter potential buyers.

Average Loan Rates Moved Lower in March and April

While used vehicle loan rates have slightly decreased to 14.13%, new vehicle loan rates have increased to 9.64%.

• The Federal Reserve, Dealertrack, and Bloomberg data indicate a mixed trend in loan rates.
• Lower used-vehicle loan rates may encourage more consumers to opt for used vehicles over new ones.

New & Used Supply Remains Tight Yet Appears to Have Bottomed

The supply of new and used vehicles has trended higher in recent weeks, suggesting that the market may have hit the floor.

• vAuto and Cox Automotive data show that while supply remains tight, it is no longer declining.
• This stabilization in supply is a positive sign for the market, potentially easing some of the pricing pressures.

Wholesale Prices Continue Declining as Retail Stops Increasing

Wholesale prices for vehicles have continued to decline, while retail prices have stabilized.

• The Manheim data indicates that wholesale prices for MY 2022 vehicles declined by 0.6% for the week.
• The stabilization of retail prices suggests that the market is adjusting to the new supply and demand dynamics.

Tax Refund Season Higher Than Last Year, But Almost Over for This Year

The total number of tax refunds is down 1% compared to 2024, but the average refund amount is higher by 3% year over year.

• A Cox Automotive analysis of IRS data shows that the tax refund season has been strong, providing consumers with additional disposable income.
• This increase in average refund amounts could support higher consumer spending in the coming months.

Cox Automotive Leading Indicators

• Leads are up year over year so far in May on Autotrader but are down on Kelley Blue Book, and leads are up for the month compared to April on Autotrader but down on Kelley Blue Book.
• Unique leads per dealer for new vehicles are down year over year, but up on used vehicles so far in May on websites hosted by Dealer.com, and new and used leads are down for the month compared to April.
• Unique credit applications per dealer on Dealertrack were up 3% year over year last week , with the trend in applications per dealer declining w/w in new but improving in used.
• Service trends on Xtime relative to last year were stable but weak in the week ending May 3, as completed appointments were down 1.8% year over year.