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US new-vehicle sales are projected to reach 1,327,100 units in October 2026, an increase of 0.2% from a year earlier after adjusting for selling days, according to a joint forecast from JD Power and GlobalData. Without the adjustment, sales would rise 3.9% year over year, reflecting an additional selling day compared with October 2025.
The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales, including retail and non-retail transactions, is expected to remain unchanged from October 2025 at 15.6 mn units.
- US new-vehicle sales are projected to reach 1.33 mn units in October 2026, up 0.2% year over year on a selling-day-adjusted basis, while retail sales are expected to decline 1.4%.
- Average monthly vehicle payments are forecast to reach an October record of $823, with loan rates rising to 6.81% and negative equity affecting 29.6% of trade-ins (see US Auto Insurance Rates by States).
- Global light-vehicle sales are expected to decline 4.8% in 2026 to 87.9 mn units, with weakness in China outweighing growth in India and other markets.
Retail demand is showing greater pressure. New-vehicle retail sales are forecast at 1,109,500 units, down 1.4% on a selling-day-adjusted basis. Unadjusted retail volumes would increase 2.3%, while the retail SAAR is expected to decline by 0.2 mn units to 13 mn.
The figures indicate that vehicle demand remains relatively stable despite higher financing costs and affordability constraints. Manufacturers are increasing incentives to support sales, while consumers are taking longer loans and shifting toward hybrid vehicles.
US retail vehicle sales face affordability pressures
Thomas King, president of OEM solutions at JD Power, said October’s performance partly reflects an unusually weak comparison period in 2025.
October results reflect the continued resilience of new-vehicle demand, with total sales on pace to rise 0.2% year over year, or 3.9% without adjusting for selling days.
Thomas King, president of OEM solutions at JD Power
He attributed part of the year-over-year comparison to the decline in October 2025 sales following the September surge in electric vehicle purchases associated with tax credits.
Retail consumer expenditure on new vehicles is projected to reach $49.2 bn in October, up 3.2%, or $1.5 bn, from October 2025. The increase reflects the additional selling day and transaction prices that remain only slightly below year-earlier levels.
The average transaction price of a new vehicle is expected to decline 0.1% to $46,329. Monthly financing costs, by contrast, are projected to increase 2.6%, with the average payment reaching $823, the highest October reading on record.
Higher interest rates and declining trade-in equity are contributing to the divergence between vehicle prices and monthly financing obligations. Buyers are borrowing larger amounts and paying more to finance those balances, even as manufacturers offer additional discounts.
Auto loan payments reach October record as negative equity rises
Declining trade-in equity has become a significant contributor to the affordability pressures facing US vehicle buyers.
Many consumers returning to dealerships purchased their existing vehicles several years ago, when constrained inventories pushed transaction prices to elevated levels. As those vehicles are traded in, more owners are finding that their outstanding loan balances exceed the vehicles’ current values.
JD Power expects 29.6% of trade-ins in October to carry negative equity, an increase of 0.6 percentage points from a year earlier.
Average interest rates on new-vehicle loans are projected to reach 6.81%, up 19 basis points year over year and the highest October level since 2023.
The forecast also represents an increase of 28 basis points from August, reversing the easing in financing rates observed over the preceding months.
Consumers are responding by extending repayment periods to reduce monthly obligations. Loans with terms of 84 months or longer are expected to account for 13.3% of new-vehicle financing in October, up 0.9 percentage points from October 2025.
Longer repayment periods are helping buyers manage monthly payments, although the combination of higher borrowing costs and lower trade-in equity continues to constrain affordability.
The share of subprime borrowers is also expected to increase. JD Power forecasts subprime penetration of 11.0%, up 1.5 percentage points from a year earlier.
Part of the increase reflects changes in the mix of buyers. Many consumers with stronger credit profiles and the financial capacity to bring forward purchases did so in 2025, affecting the year-over-year comparison.
Automakers increase incentives to support new-vehicle demand
Manufacturers are expanding discount programmes as higher financing costs make new vehicles less affordable.
Average incentive spending is projected to reach $3,304 per vehicle in October, an increase of 13.1% from a year earlier and the largest year-over-year increase recorded in the past four months.
Incentives are expected to represent 6.3% of manufacturers’ suggested retail prices (MSRP), up 0.7 percentage points from October 2025.
The distribution of these incentives differs considerably by powertrain. For traditional internal combustion engine vehicles and hybrids, average incentive spending is forecast to increase by $468 per vehicle, or 17.5%, to $3,142.
Electric vehicle incentives are moving in the opposite direction. Average EV discounts are projected to decline by $5,455 per unit, or 42.0%, to $7,531, compared with the elevated incentive levels recorded in October 2025.
The differing trends reflect changes in the market compared with last year’s unusually strong period for EV-related purchasing activity.
Consumer preferences are also shifting toward hybrid vehicles.
Hybrids are expected to account for 18.6% of retail new-vehicle sales in October, an increase of 4.0 percentage points year over year. JD Power attributes the growth to elevated fuel prices and greater availability of hybrid models.
The EV share of retail sales is forecast at 6.9%, down 0.3 percentage points from October 2025.
Global vehicle sales fall as China’s market contracts
Global light-vehicle demand is weakening more sharply than the US market, primarily because of falling domestic sales in China.
David Oakley, manager of Americas vehicle sales forecasts at GlobalData, estimated that worldwide light-vehicle sales declined 4.9% year over year in September to 7.7 mn units. The global annualized selling rate fell to 89.2 mn units, compared with 91.3 mn in August.
China remained the principal source of weakness. Domestic vehicle sales, excluding vehicles intended for export, declined an estimated 25.6% year over year in September.
The Chinese market continues to face pressure following the withdrawal of trade-in subsidies, even as the country’s vehicle exports increase.
Growth in other markets has been insufficient to offset the contraction.
India recorded the strongest contribution to global sales growth, with September volumes estimated to have increased 21.3% from a year earlier.
Tax reductions and more accommodating financing conditions supported demand during the country’s festival season.
Western Europe and South America also recorded sales growth, although declines in Eastern Europe and Korea partly offset those gains.
Global auto sales forecast cut to 87.9 mn vehicles in 2026
GlobalData expects the weakness in China’s domestic market to continue affecting worldwide vehicle sales through the remainder of 2026.
Global light-vehicle sales in October are forecast to decline 7.4% year over year to 7.7 mn units. That would correspond to an annualized selling rate of 89.2 mn vehicles, down 7.6% from October 2025.
India is expected to maintain positive sales momentum, but continued contraction in China is projected to outweigh growth elsewhere.
European vehicle sales could decline slightly, partly because higher real interest rates are weighing on demand in Turkey.
Sales in the Middle East are expected to fall sharply amid regional conflict.
GlobalData has lowered its full-year 2026 light-vehicle sales forecast to 87.9 mn units, compared with its previous estimate of 88.3 mn units a month earlier.
The revised projection represents a 4.8% decline from 2025.
According to Oakley, the Chinese market is expected to remain a drag on global light-vehicle sales until 2027, leaving growth in India and other expanding markets insufficient to prevent an overall contraction in 2026.
