A logical person would look at everything going on with the auto industry right now — high interest rates, record-high prices, high inflation, high gas prices, tariffs, the unknowns of war and low consumer confidence — and probably come to the conclusion that sales are more likely than not in the toilet, but they’d be very wrong. For the most part, U.S. auto sales — despite everything — have been holding steady.
There’s one big reason for that, according to analysts: Americans love spending money. No, I’m not joking, that’s what they actually said. Of course, there’s still a very good chance this could all go boom fairly soon. That’s sort of the nature with these things, after all. From Automotive News:
“I think that the American consumer is going to be doing what they do best, and that’s spend money,” said Patrick Manzi, NADA’s chief economist. “We’re just in a unique industry here, and people love to buy cars.”
Yet, there are “a lot of big macro indicators that aren’t too hot,” Manzi said.
Several key economic indicators are flashing warning signs: April’s Consumer Price Index rose 3.8 percent year over year — the fastest inflation growth in three years — while the Conference Board’s Consumer Confidence Index dipped roughly a percent in May, the Cox Automotive Dealer Sentiment future market index fell 16 percent from the first quarter, and slow hiring has left job seekers on the sidelines.
Still, May 2026 U.S. auto sales appear to be holding steady. S&P Global Mobility projects 1.44 million vehicles sold last month, down slightly from March and April but above the same volume from last year for the first time in seven months.
Judy Farcus Serra, COO and CFO at Headquarter Automotive, said she has seen a slight uptick in vehicle sales volumes, which she attributed to consumers coming back into the dealership after hesitating due to high prices.
Ultimately those buyers still need a car, she said.
There’s an argument to be made that because of fundamental shifts in the auto industry following the pandemic, it has been largely insulated from the rest of the economy and other headwinds it could face. That’s simply because the folks who are more susceptible to economic issues have already been priced out.
Transaction prices rose significantly during and after the pandemic, hikes driven by a mix of consumers upsizing vehicles, supply chain shortages, inventory constraints and more expensive electric vehicles.
The new-vehicle average transaction price exceeded $50,000 for the first time in September 2025.
“This has really been the shift,” said Jessica Caldwell, head of insights at Edmunds. “The new-car market has eliminated a lot of buyers just from a pricing standpoint because we’ve seen prices rise so much in the past six years.”
Those less flush with cash have moved on to used vehicles, she said, and therefore wealthier new car buyers “may not be feeling the pinch as much.”
Well-heeled shoppers have money in the stock market, which has seen record growth driven by the artificial intelligence boom.
That being said, some contend that the auto industry is very much not an island, and light vehicle sales have closely tracked recessions. While the industry is certainly a bit more insulated than others, it’s likely that if all the things I mentioned earlier keep up, cracks will begin to show and the dam will break.
