Double-digit decline in US new-vehicle sales forecast

27 March 2026

What can be expected to happen to the US new-vehicle market in March? Are declining sales a true indication of the sector’s performance, or purely a skewed result? JD Power provides its latest sales forecast for the market.

Total new-vehicle sales for March 2026, including retail and non-retail transactions, are projected to reach 1,372,877 units. This equates to a year-on-year decline of 11.4%. However, compared with February 2026, it marks an increase of 11.9%.

There are 25 selling days this month, one fewer than March 2025. Without adjusting for selling days translates to a year-on-year drop of 14.8%.

The seasonally-adjusted annualised rate (SAAR) for total new-vehicle sales this month is expected to be 16 million units. This is down by 2.1 million units year on year, and up by 470,306 units from February 2026.

New-vehicle retail sales for March 2026 are projected to reach 1,120,601 units. This is a 13.3% decrease from March 2025 but a 14.3% increase from the previous month. Comparing the same volume without adjusting for selling days translates to a decrease of 16.6% from 2025.

The SAAR for retail new-vehicle sales is expected to be 13.1 million units in March 2026. This is down 2.1 million units from 12 months prior and up 391,242 units from February 2026.

Total new vehicle sales for the first quarter of 2026 are projected to reach 3,655,500 units. This equates to a year-on-year drop of 7.4% when adjusting for the number of selling days.

Best 2026 result so far

‘Vehicle sales in March are on pace to deliver the best monthly results seen so far this year, with total sales expected to reach 16 million units on an annualised basis. However, the comparison to March of last year presents a far less positive picture,’ said Thomas King, president of OEM solutions at JD Power.

This apparent contradiction is a technical anomaly. In March 2025, sales were inflated by consumers rushing to showrooms, anticipating increases in vehicle prices due to tariffs.

In fact, the rush to showrooms last March resulted in a total annualised sales pace of 18.1 million. This was the highest of any month in 2025 and well above the full-year sales pace of 16.3 million. Ultimately, the year-on-year sales comparison does not help understand the underlying health of consumer demand for new vehicles this month.

‘Putting aside last year’s results, March 2026 shows continued strong demand for new vehicles, despite concerns around fuel prices and economic uncertainty. In fact, March results would have been even stronger were it not for unusually low availability of one of the industry’s best-selling vehicles,’ said King.

Furthermore, the elimination of Federal Electric Vehicle credits is a headwind that the industry has had to overcome as consumers interested in battery-electric vehicles (BEVs) face higher prices.

Affordability still consequential

‘While demand remains strong, new vehicle affordability remains the primary barrier to higher vehicle sales. Average retail transaction prices are expected to rise 2.5% to $45,859 (€39,841) from a year ago,’ explained King.  

In aggregated terms, manufacturers’ incentive spend per vehicle is on track to reach $3,325, which is $165 higher than a year ago. However, the changes in average discounts are heavily influenced by the decline in BEV sales. Discounts on BEVs are expected to average $11,258 in March, down $940 compared with March 2025.

Meanwhile, discounts on non-BEVs are projected at $3,030, an increase of $353 from last year. As a percentage of the manufacturer’s suggested retail price (MSRP), discounts on non-BEVs are at 6% in March, up 0.6 percentage points (pp) from a year ago.

The increased availability of discounts on non-BEVs was expected. Manufacturers have greater latitude to incentivise non-BEV purchases due to the higher profit margins on those vehicles relative to BEVs.

Longer loan terms in the US

Higher average prices are translating to higher monthly payments, with the average monthly finance payment reaching $805. This is up $38 from a year ago and is the highest ever for March.

In response, more consumers are turning to 84-month loan terms. These are expected to account for 12.5% of financed sales this month compared to 10.6% a year ago.

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 March is 6.55%. This is down 36 basis points from a year ago (one basis point equals 0.01%).

‘The average used-vehicle price is $30,166, up $860 from a year ago. This reflects the continued low supply of recent model-year used vehicles due to lower new-vehicle production during the pandemic. The ongoing strength of used-vehicle prices continues to assist new-vehicle buyers who have a trade-in,’ noted King.

The average trade-in equity in March is $6,869. This is down $240 from a year ago, however, the figure is still high from a historical perspective.

The number of new-vehicle buyers with negative equity on their trade-in is expected to reach 30.5%. This is up 4.2pp as consumers who purchased during the peak of inventory shortages four years ago return to the market.

‘Regarding total consumer spending on new vehicles, the elevated transaction prices in March are not enough to offset the inflated sales pace a year ago. Consumers are on track to spend $49.4 billion on new vehicles this month, 13.9% lower than a year ago,’ said King.

Challenging comparisons in the US

Retailer profit per unit, including vehicle gross plus finance and insurance income, is expected to be $2,452. This is up $26 from March 2025 and up $80 from February 2026. Total aggregated retailer profit from new-vehicle sales is projected to be $2.6 billion. This is down 15.1% from last year, with the decline driven by last year’s inflated sales pace.

‘Looking ahead, interpreting year-on-year results will remain unusually challenging for most of the year, as the industry continues to work through the aftereffects of two major pull-ahead events in 2025,’ projected King.

The first was the tariff-driven rush to showrooms in March and April, when approximately 173,000 additional purchases were pulled forward. This was followed by a payback period that weighed on subsequent months.

The second was the BEV pull-ahead ahead of the 30 September expiration of federal EV tax credits. This temporarily inflated BEV demand in late summer before shifting to a payback dynamic that persisted into the fall.

As a result, year-on-year comparisons will remain inherently noisy, reflecting the timing of these events more than underlying demand. This will continue until the industry fully laps both events. It will likely be late in the year before comparisons return to a more normalised pattern. Only then will there be a clearer read on market momentum.

Sales details

• Fleet sales are expected to total 252,276 units in March, down 2% from March 2025. Fleet volume is expected to account for 18.4% of total light-vehicle sales, up 1.8pp year on year.
• Internal combustion engine (ICE) vehicles are projected to account for 75.7% of new-vehicle retail sales, up 0.1pp year on year.
• Full hybrids (HEVs) are expected to account for 15.5% of new-vehicle retail sales, up 2.2pp year on year.
• BEVs are expected to account for 6.9% of sales, down 1.9pp from March 2025.
• Plug-in hybrid vehicles (PHEVs) are on pace to make up 1.4% of sales, down 1pp year on year.
• US final assembly vehicles are expected to make up 55.6% of sales in March, up 4.5pp from a year ago.

Retail details

• Retail inventory levels are currently at 2.22 million units, up 4.5% year on year.
• The industry’s inventory days of supply are 69 days in March, up from five days from a year ago.
• The average new-vehicle retail transaction price in March is expected to reach $45,859, up $1,102 year on year. The transaction price as a percentage of MSRP was 89.2% in March, down 0.3pp from a year ago.
• The average new-retail transaction price for ICE models and HEVs is expected to reach $45,634, up $1,228 year on year. The average new-retail transaction price for BEVs is expected to reach $45,287, up $110 year on year.
• Retail buyers are on pace to spend $49.4 billion on new vehicles, down $8 billion year on year.
• Average incentive spending per unit in March is expected to reach $3,325, up $165 from March 2025. Incentive spending as a percentage of the average MSRP is expected to increase to 6.5%, up 0.2pp year on year.
• Average incentive spending per unit for ICE models and HEVs is expected to reach $3,030, up $353 from March 2025.
• Average incentive spending for BEVs is expected to reach $11,258, down $940 year on year.
• Leasing is expected to account for 22.9% of sales this month, down 0.5pp from a year ago.

Dealer details

• The average time a new vehicle remains in the dealer’s possession before sale is expected to be 55 days in March, down from 57 days a year ago.
• 28.7% of vehicles were sold in less than 10 days in March, down 2.6pp year on year.
• Average monthly finance payments are on pace to be $805, up $38 from March 2025. The average interest rate for new-vehicle loans is expected to be 6.55%, down 0.36pp year on year.
• So far in March, average used-vehicle retail prices are $30,166, up $860 from a year ago.
• Trade-in equity is trending towards $6,869 this month, down $240 year on year.
• 30.5% of trade-ins are expected to carry negative equity this month, an increase of 4.2pp from March 2025.
• Finance loans with terms greater than or equal to 84 months are expected to reach 12.5% of finance sales this month, up 1.9pp year on year.

Electrification outlook

Tyson Jominy, senior vice president of OEM customer success at JD Power, highlighted that the BEV share is nearly 2pp below last year. This is well off the high driven by changes in US policy in the third quarter of 2025.

The pullback is concentrated in the mass market, where the BEV share contracted to 1.9% from 4% a year ago. In contrast, BEVs represent over 26.4% of premium sales year to date. This is a figure which includes direct-to-consumer brands, and only 5pp below last year’s pace, he added.