Cox Automotive Auto Market Report: August 5

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 – August 5, 2025

Key Highlights

• Consumer spending accelerated in July, signaling renewed economic momentum and potential upside for retail auto sales.
• Loan rates for both new and used vehicles are slowly declining from 25-year highs, improving affordability.
• New and used vehicle supply continues to tighten, supporting price stability and dealer profitability.

Consumer Spending Shows Renewed Strength

After a cooling period in May and stabilization in June, consumer spending surged in July, reflecting growing confidence and economic resilience.

• Weekly spending trends showed a clear upward trajectory, with year-over-year growth accelerating.
• This momentum bodes well for retail sectors, including automotive, as consumers re-engage with big-ticket purchases.

Labor Market Remains Stable

Continuing claims held steady at 1.95 million nationally, indicating a resilient labor market that supports consumer confidence.

• Stability in jobless claims suggests economic conditions remain favorable for sustained consumer activity.

Sentiment Improves in July, Dips Slightly August

The Index of Consumer Sentiment rose 1.3% in July, although early August readings show a slight decline.

• Sentiment gains in July were driven by easing inflation and stable fuel prices.
• The dip in August may reflect seasonal fluctuations or emerging macroeconomic concerns.

Retail Sales Hold Strong

Both new and used vehicle sales trended higher toward the end of July, outperforming year-ago levels.

• Retail momentum is supported by improved consumer sentiment and promotional financing.
• Dealers are seeing consistent demand across segments, with used vehicles showing particular strength.

Financing Conditions Improve

Low APR financing offers reached their highest levels in years, and average loan rates declined in July.

• The average used vehicle loan rate fell to 14.02%, while new vehicle rates dropped to 9.02%.
• These declines enhance affordability and support continued retail growth.

Inventory Tightens Further

New and used vehicle supply declined throughout July, reinforcing pricing discipline and dealer margins.

• New vehicle days’ supply fell weekly, while used inventory also trended lower.
• Tight supply conditions are expected to persist, especially as demand remains elevated.

Used-Vehicle Prices Remain Stable

Retail and wholesale price indices for used vehicles tracked closely together, with minimal weekly declines.

• The average MY 2022 retail price dipped just 0.2%, while wholesale prices fell 0.1%.
• Price stability reflects balanced supply-demand dynamics and disciplined inventory management.

Cox Automotive Leading Indicators

Cox Automotive Leading Indicators are mostly positive.

• Dealer leads were up year over year in July on Autotrader but were down on Kelley Blue Book, but leads were up for the month compared to June on both sites.
• Unique leads per dealer are down year over year so far in August for both new and used vehicles on websites hosted by Dealer.com, and new and used leads are up for the month compared to July, with just this weekend to compare.
• Unique credit applications per dealer on Dealertrack were up 12% year over year last week, with the trend up strongly week over week in aggregate, with improving growth in new and used loan applications.
• Service trends on Xtime relative to last year improved in the week ending July 26, as completed appointments were down 2% year over year.