New vehicle retail sales are expected to finish July at 1.19 million, with total retail consumer spending approaching a record $52 billion for the month as more incentives are being offered to bring consumers to the market, according to the JD Power-Global Data Forecast.
Driving the news: Though the market has changed in the past year without the pull-ahead of the expiring tax credits on EVs, JD Power reported stronger sales this July.
On a percentage basis, retail sales increased 0.9%, elevating the seasonally adjusted average rate (SAAR) to 13.8 million.
Total sales, including non-retail transactions, were projected to finish at 1.4 million, raising the SAAR to 16.9 million.
Spending was up $1.2 billion from July 2025.
“Demand for new vehicles continues to be strong, with July delivering the highest annualized sales pace so far this year,” said Thomas King, president of OEM solutions at JD Power, in a press release.
Shift to hybrids: The September 2025 elimination of the federal EV credits and the rising gas prices due to the conflict in the Middle East drove added interest in hybrids, King noted.
Hybrids hit a 15.9% share of sales, a 2.5% increase from last year.
Notably, EV share fell to 3.3%, bringing the share down to 7%. Along with clean vehicle credits disappearing, manufacturers pulled back $759 of incentives on the units.
Incentives on ICE and hybrids, meanwhile, increased by $578 or 22.2% to an average of $3,181.
Interest rates drop: JD Power in July also observed the lowest interest rate since 2022 at 6.54%.
The average monthly payment set a July record of $808.
Negative equity continues to be part of the story as 29.9% of trade-ins are underwater.
OUTSMART THE CAR MARKET IN 5 MINUTES A WEEK
Get insights trusted by 55,000+ car dealers. Free, fast, and built for automotive leaders.
Bottom line: Though there are many headwinds, buyers are staying in the market thanks to OEMs providing enticing incentives.
“Manufacturers are leaning harder on discounts to keep buyers in the market,” King said. “Average incentive spending per vehicle is trending towards $3,451, an 8.1% increase from a year ago.”
He added: “Part of that jump reflects tariff dynamics last year, since several OEMs made unseasonal pullbacks in incentive spending last July as they cut discounts precautionarily to offset tariff costs. Incentives as a percentage of MSRP are expected to hit 6.7% in July, up 0.4 percentage points from July 2025.”
A quick word from our partner
Running a dealership is hard.
Between vendor strategy, process management, market timing, and hiring, one wrong decision can cost hundreds of thousands.
That’s why we created CDG Circles.
It’s not a 20 Group. Circles connects you with top operators across brands through confidential text-based chats — giving you daily intel, real-world feedback, and instant answers from people who actually live it.
Ask questions 24/7 and get real-time responses from experienced dealers in curated peer groups built specifically for your level and store type.
No vendors. No sales pitches. No travel. Just real operators helping each other win.
