Yardeni Research president Ed Yardeni discusses the economic drivers heading into 2026 with Making Money.
A new idea from Cox Automotive projects is new car sales are expected to decline slightly in 2026 from last year, which exceeded industry expectations.
Cox Automotive has predicted that the US will sell 15.8 million new cars in 2026, which is a 2.4% decrease from last year’s sales levels. It also projects a 1.5% year-over-year decline in retail sales, while fleet sales are expected to decline by 6.1% from 2025.
Additionally, Cox expects a slight year-over-year decline in used car sales as cost pressures continue to drive demand for lower-priced vehicles. The group is also seeing inflows of leases EV and plug-in hybrid traffic is down 3 percent from last year.
“The truth is, many metrics for auto sales in 2025 were a little stronger than most forecasts – including ours,” said Jeremy Robb, interim chief economist at Cox Automotive. “Our forecast for 2026 shows a slower, but still positive, market.”
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Cox Automotive predicts a slow but strong auto market in 2026. (Stock)
“While we expect most sales metrics to be lower compared to 2025, the expected decline is small, and we think there will be good news with interest rates and tax refunds helping the auto market in the first half of 2026,” added Robb.
Cox Automotive’s vision is multifaceted economic power which will help further disrupt the automotive industry in 2026.
The firm’s analysis noted “bifurcated consumer dynamics” with high-income households seeing benefits from rising financial markets, tax relief and lower interest rates that help drive new car purchases.
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Cox’s vision for 2026 anticipates more commercial activity as consumers seek affordability. (Getty Images)
However, low-income consumers are expected to continue to face the financial difficulties of inflation and the high cost of buying new and used cars, the company explains that “the separation will accelerate the trading behavior, making the value perception critical in the market as a whole.”
Although inflation appears to be slowing and interest rates are falling by The Federal Reserve may boost domestic wealth, the report noted that “uncertainty surrounding the Federal Reserve’s leadership and independence is creating volatility, slowing the housing recovery and slowing auto sales growth.”
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A sluggish labor market and continued inflation are expected to weigh on consumers as they weigh larger purchases. (David Paul Morris/Bloomberg via Getty Images)
Cox Automotive also commented “useless expansion“What’s happening in the US economy, with GDP rising on the back of investment and productivity gains as the labor market stagnates.
“The slow growth of jobs will reduce the construction of houses and confidence in buying big tickets including cars,” explains the opinion. “This weak labor market will be a hindrance to the auto market, but the gains in the stock market can be an emergency.”
The company’s analysis also noted the impact of uncertainty from the Trump administration’s policy changes affecting the automotive industry – especially electric vehicles (EVs).
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“Taxes, fuel economy reforms and changes to the tax code will create a difficult and volatile environment, Renegotiation of the USMCA front and center in 2026,” wrote Cox analysts. “Meanwhile, the electric vehicle market will enter its next chapter in 2026, with no government incentives and non-lease EV models flooding the used market.”
