Cox Automotive Auto Market Report: September 2

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 – Sept. 2, 2025

Key Highlights

• Consumer spending growth accelerated in July and held steady in August, signaling resilient demand heading into late summer.
• Financing conditions are easing at the margin: low‑APR offers remain elevated, the average used rate fell to 13.93% in August, and the average new rate edged up slightly to 9.09%.
• Used retail sales extended a four‑week growth streak even as new sales dipped in the latest week, reflecting shoppers’ sensitivity to price and payment.

Consumer Spending and Labor Backdrop

Household demand remained firm through August as labor conditions stayed supportive, with continuing claims near 2 million.

• Total consumer spending saw year over year growth accelerate in July and then stabilize in August, keeping overall momentum intact.
• Continuing jobless claims eased to 1.95 million nationally, underscoring a still‑tight labor market even as hiring cools.

Consumer Sentiment and Fuel Costs

Confidence ticked higher into late summer, helped by modest improvement despite the drag from fuel prices.

• The Morning Consult Index of Consumer Sentiment increased 1.3% in July and 0.6% in August, a slow but constructive uptrend.
• The report tracks sentiment alongside average unleaded prices, reinforcing fuel’s influence on perceptions of affordability.

Retail Sales: New vs. Used

New‑vehicle sales reached a seasonal peak in August before easing, while used‑vehicle retail continued to improve for a fourth consecutive week.

• New retail sales “reached a summer peak in August,” then dipped in the most recent week, suggesting a typical late‑season pattern as incentives and inventory rebalance.
• Used retail sales grew for the fourth week in a row, reflecting shoppers’ payment sensitivity and relative value in the used market.

Financing: Rates and Incentives

Affordability is getting incremental help from financing: promotional offers remain elevated, and used rates eased in August.

• Low‑interest‑rate offers remained high in August and were near their strongest levels since May 2022, providing targeted relief for qualified buyers.
• The average used auto rate fell to 13.93% in August, while the average new auto rate rose slightly to 9.09%, both well off the cycle highs earlier this year.

Inventory: Supply Levels

New and used days’ supply trended higher in the latest week but stayed tighter than a year ago, signaling a balanced market without excess.

• New and used inventory levels increased week over week, yet both remained constrained relative to last year, limiting discounting while supporting price discipline.

Pricing: Gradual Normalization

Pricing continues its slow glide path lower on the used side, with retail steady and wholesale easing modestly.

• Average model‑year 2022 retail prices were flat last week, while wholesale prices fell 0.2%, indicating muted but ongoing normalization.
• Three‑year‑old retail and wholesale price indices show gradual convergence toward pre‑pandemic baselines as supply recovers.

Cox Automotive Leading Indicators

Our ecosystem indicators point to steady demand generation, mixed lead trends by brand and platform, and improving new‑loan activity.

• Dealer leads were up year over year in August on Autotrader, but down on Kelley Blue Book. Leads were up for the month compared to July on Kelley Blue Book, but down slightly on Autotrader.
• Unique leads per dealer were up year over year in August for new and used vehicles on websites hosted by Dealer.com, and new leads were up for the month compared to July, but used leads were down slightly.
• Unique credit applications per dealer on Dealertrack were up 6% year over year last week, with the trend stable week over week in aggregate, with a declining trend in used loan applications and an improving trend in new loan applications.
• Service trends on Xtime relative to last year were stable in the week ending Aug. 23, as completed appointments were down 2% year over year.