Total new-car sales in January are expected to increase year-over-year, even as retail sales dip and profits soften across the board.
The details: With one more selling day in January than in 2025, total (retail + non-retail) new-vehicle sales are forecast to reach 1,118,700 over the 26-day selling period, a 2.7% decrease versus last year’s 25-day period, according to a collaborative J.D. Power and GlobalData report.
New-vehicle retail sales for January 2026 are projected at 908,500, a 3.7% decrease from January 2025.
Without adjusting for selling days, retail sales volume is up 1.2% from last year.
The retail SAAR is expected to be 12.7 million units, down 0.5 million from January 2025.
Between the lines: For retail, the new-vehicle average transaction price is expected to rise in January, while profit per unit and total profit edge down.
The ATP is forecast to reach $45,880, up $512 or 1.1% from last January.
Excluding EVs, the average price for non-electric vehicles rose 0.9% to $45,510.
Retail profit per unit is expected to be $2,148, down $62 from January 2025, but up $224 from December 2025.
Total aggregate retailer profit from new-vehicle sales this month is projected at $1.9 billion, down 2.6% year over year.
Why it matters: Transaction prices are still drifting up while per-unit profits and total front-end take are easing (classic early-cycle margin compression). For dealers, that means working harder on mix, F&I, and used to keep overall profitability steady, even as new-car grosses normalize and payment sensitivity stays elevated.
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Digging deeper: Easing interest rates and strong used-vehicle values are helping offset some of the payment pressure, with manufacturer incentives being a mixed bag, per J.D. Power.
The average interest rate for new-vehicle loans in January is 6.29%, down 48 basis points from a year ago.
The average used-vehicle price is $28,550, up $490 year over year, with average trade-in equity at $8,091, up $293.
Average manufacturer incentive spend per vehicle is on track to reach $3,192, just $25 higher than a year ago—with discounts on non-EVs projected at $3,004, an increase of $403 from.
What they’re saying: “Despite a moderate start to the year, the full-year outlook remains relatively positive,” said Thomas King, president of OEM solutions at J.D. Power, per a press statement. “Rising lease-return volumes, plus the expectation of lower interest rates present meaningful tailwinds to the industry. More importantly, as OEMs and Dealers navigate the evolving economics of EVs, there is likely to be an opportunity to improve affordability of ICE vehicles as production schedules shift towards a more profitable mix of vehicles for both OEMs and Dealers.”
Bottom line: January points to a 2026 where volume is steady, prices stay high, and profit per copy normalizes. Dealers who lean into rate relief, trade equity, and used options to make payments work could be best positioned to protect margins as the market transitions from peak-price, peak-profit conditions into a more traditional, grind-it-out retail environment.
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