Consumers are spending $50B on new cars this July, J.D. Power says

With a week left in the month, J.D. Power says U.S. consumers are on pace to spend $49.8 billion on new vehicles, the highest total ever recorded for July, and an 11% jump from last year.

That might sound like a boom. But look closer, and the picture’s more complicated.

Why: Because new-vehicle retail sales are forecasted to hit 1.2 million units in July, up 4.1% vs last year after adjusting for selling days. Unadjusted, that’s 8.1% higher.

But that growth comes with a few caveats.

First, the year-over-year comparison is fuzzy. And the latest forecast reminds us that last year’s July baseline was inflated by the CDK Global software outage, which pushed about 85,000 June deals into July and August.

Then, there’s the fact that some of this summer’s demand already came and went. 

King’s point: Even now, with volume settling, incentives aren’t doing much of the heavy lifting.

“Instead of discounts rising as they normally would at this time of year, incentive spending has edged down to 6.1% of MSRP in July from 6.3% in January, reflecting the cost pressure that manufacturers are under due to tariffs,” he said.

In other words: Buyers are shelling out more, getting less off the tag, and still showing up. That’s what’s driving the nearly $50 billion headline.

Between the lines: The Sept. 30 EV tax credit deadline is also pulling another wave of demand forward, as buyers scramble to lock in the $7,500 incentive.

“In sum, the retail sales growth in July is, at first glance, strong but even more so after consideration of the factors described above,” King said.

Bottom line: July tells us demand holding, but it also solidifies how noisy, seasonal, and incentive-sensitive the market is right now. My guess is…dealers who can cut through that chaos, simplify decisions, and bring clarity to buyers are the ones closing right now.