High prices will continue to affect new car sales in 2026: Cox – WardsAuto
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Years of supply chain constraints and government policy shifts have created a “new baseline” for vehicle pricing, according to the industry analysts.
High new-vehicle prices are down a bit from record highs, but they’re not going away.
That’s the biggest reason annual sales of new light vehicles will stay in the current range of 15 million to 16 million in the near future — substantially lower than the pre-pandemic level of 17 million-plus, according to Cox Automotive.
Cox Automotive reported the average new-vehicle transaction price in November was $49,814. That’s up 1.3% versus a year ago, but down slightly vs. September 2025 at $50,080, the first time the average topped $50,000, according to Kelley Blue Book, a Cox Automotive company.
“Pandemic-induced production constraints and supply chain chaos didn’t just disrupt the market temporarily. They fundamentally restructured pricing dynamics,” Erin Keating, executive analyst for Cox Automotive, said in a Dec. 17 webinar.
“This elevated plateau is now the new baseline, which has the market anchored at these higher price points,” Keating said.
In the webinar, Cox Automotive issued a 2026 U.S. new-vehicle sales forecast of 15.8 million. That’s down 2.4% vs. an estimated 16.2 million for 2025. The fall-off in 2026 is due first and foremost to the lack of affordability, Cox Automotive analysts said.
Before pandemic-related shutdowns hit in the first quarter of 2020 and scarcity drove up prices, U.S. new-vehicle sales topped 17 million for a record five years in a row, ending in 2019. The forecast of 16.2 million for 2025 would be the highest since then.
Meanwhile, government policy changes gave the 2025 total a couple of short-term boosts, Cox Automotive said in the webinar.
Early in 2025, customers wanted to beat expected tariff-related price hikes. In the third quarter of 2025, electric-vehicle buyers rushed to make purchases before the $7,500 federal EV tax incentive expired Sept. 30.
Tariff-related price hikes have not materialized as much as expected, but tariffs could still drive up prices as automakers run out of ways to offset the increases, said Jeremy Robb, interim chief economist for Cox Automotive.
“Economic growth was forecasted to be highly impacted from the tariffs, and cause much volatility across the economy. But the impact from policy actions shows a lag effect,” he said in the webinar.
On top of high average transaction prices, a laundry list of other auto-related costs are also on the rise, Robb said.
Those include parts and equipment, maintenance and repair, and auto insurance. All have experienced steeper rises than the average Consumer Price Index over the past five years — especially auto insurance, which has increased an average of 13% annually for the past five years, Robb said.
“The cumulative weight of all these increases has pushed total vehicle-ownership cost beyond reach for many middle- and lower-income households, constraining market access and accelerating the affordability crisis,” he said.
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There is just one standard internal-combustion-engine winner on our 2025 Wards 10 Best Engines & Propulsion Systems' winners list, with the rest employing either full or partial electrification.
J.D. Power finds wait times, as well as poor EV service, drag down scores. Regulators cite billions lost to hidden fees, while regional enforcement highlights problems from Florida to Ohio.
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