The total sales forecast
Total new-vehicle sales for July 2025, including retail and non-retail transactions, are projected to reach 1,380,500, a 3.2% increase from July 2024 according to a joint forecast from J.D. Power and GlobalData. July 2025 has 26 selling days, one more than July 2024. Comparing the same sales volume without adjusting for the number of selling days translates to an increase of 7.4% from 2024.
The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is expected to be 16.4 million units, up 0.8 million units from July 2024.
The retail sales forecast
New-vehicle retail sales for July 2025 are projected to reach 1,159,500, a 4.1% increase from July 2024. Comparing the same sales volume without adjusting for the number of selling days translates to an increase of 8.2% from 2024.
The takeaways
Thomas King, president of the data and analytics division at J.D. Power:
“July retail sales are projected to finish 4.1% higher than a year ago but interpreting that gain requires care due to events both last year and this year that disrupted normal monthly sales patterns. There are two timing-related factors to consider. First, year ago results were affected by a dealer software outage in June 2024, which caused 85,000 sales that should have occurred in June to actually occur in July and August 2024, making year-over-year comparisons appear weaker than actual performance. Second, the tariff-related pull-ahead of 173,000 sales into March and April of this year, is now being paid back, deflating July 2025 results.
“In addition, July results are also being impacted by lower-than-normal incentive escalation by manufacturers. Instead of discounts rising as they normally would at this time of year, incentive spending has edged down to 6.1% of MSRP in July from 6.3% in January, reflecting the cost pressure that manufacturers are under due to tariffs.”
“Finally, the announcement that federal credits of up to $7,500 on electric vehicles will expire on Sept. 30 is causing many EV intenders to accelerate their purchases that otherwise would have occurred either later this year or early next year. In sum, the retail sales growth in July is, at first glance, strong but even more so after consideration of the factors described above.”
The average new-vehicle retail transaction price in July is expected to reach $45,063, up $938 or 2.1% from July 2024.
The average manufacturer incentive per vehicle is on track to reach $3,051, an increase of $273 from June, and an increase of $52 from a year ago. However, expressed as a percentage of MSRP, incentive spending is currently at 6.1%, a decrease of 0.1 percentage point from a year ago.
Total retailer profit per unit—which includes vehicle gross plus finance and insurance income—is expected to be $2,257, up $23 from July 2024, but down $52 from June. Total aggregate retailer profit from new-vehicle sales for this month is projected to be $2.5 billion, up 10.1% from July 2024.
“The elevated sales pace, combined with strong average transaction prices mean consumers are on track to spend nearly $49.8 billion on new vehicles this month—11.3% higher than a year ago and the highest on record for the month of July.”
Higher prices translate to higher monthly loan payments. Average monthly finance payments in July are on track to reach $742, an increase of $12 from July 2024, and the highest on record for the month of July. The average interest rate for new-vehicle loans is 6.54%, a decrease of 30 basis points from a year ago. Finance loans with terms greater than or equal to 84 months are expected to reach 11.6% of finance sales this month, up 2.7 percentage points from July 2024.
“Fleet sales are projected to decline 0.8% from a year ago, as manufacturers continue to prioritize retail buyers over the historically less-profitable fleet channel.
“The average used-vehicle price is trending towards $29,514, up $896 from a year ago. This reflects the combination of reduced supply of recent model-year used vehicles—due to lower new-vehicle production during the pandemic—fewer lease maturities and manufacturers moderating discounts. The rise in used prices is good news for new vehicle buyers trading in their used vehicle, but is merely offsetting the higher loan balances that exist on vehicles being traded in. Average trade-in equity in July is $7,984, down $4 from a year ago. The number of new-vehicle buyers with negative equity on their trade-in is expected to reach 25.5%, an increase of 1.9 percentage points from July 2024.
“August results will again require cautious interpretation. The 2024 dealer software outages that suppressed June sales inflated volumes in July and August, will again distort year-over-year comparisons. At the same time, the payback from this year’s tariff-driven pull-ahead in March and April will continue to weigh on August sales, although at a much more diminished level. Pricing and incentive decisions formed by tariff expectations will also affect the sales pace. On average, tariffs are adding $4,275 per vehicle, though the effects on individual models vary widely. Despite this, most price increases have remained modest, with some models seeing little to no change. Additional price adjustments are expected through the fall season, especially as new model-year vehicles launch, but final pricing strategies may not emerge until after year-end sales events.”
Sales & SAAR Comparison
| U.S. New Vehicle | July 20251, 2 | June 2025 | July 2024 |
| Retail Sales | 1,159,522 units
(4.1% higher than July 2024)2 |
1,030,502 units | 1,071,373 units |
| Total Sales | 1,380,502 units
(3.2% higher than July 2024)2 |
1,263,142 units | 1,285,672 units |
| Retail SAAR | 13.4 million units | 12.6 million units | 12.6 million units |
| Total SAAR | 16.4 million units | 15.2 million units | 15.6 million units |
1 Figures cited for July 2025 are forecasted based on the first 16 selling days of the month.
2 July 2025 has 26 selling days, one more than July 2024.
The details
- Fleet sales are expected to total 220,980 units in July, down 0.8% from July 2024. Fleet volume is expected to account for 16.0% of total light-vehicle sales, down 4.0 percentage points from a year ago.
- Internal combustion engine (ICE) vehicles are projected to account for 74.0% of new-vehicle retail sales, a decrease of 3.7 percentage points from a year ago. Plug-in hybrid vehicles (PHEV) are on pace to make up 2.2% of sales, up 0.2 percentage points from July 2024, while electric vehicles (EV) are expected to account for 10.9% of sales, up 1.6 percentage points, and hybrid electric vehicles (HEV) are expected to account for 13.9% of new-vehicle retail sales, up 2.9 percentage points.
- U.S. final assembly vehicles are expected to make up 54.7% of sales in July, up 3.9 percentage points from a year ago.
- Trucks/SUVs are on pace to account for 82.3% of new-vehicle retail sales, up 2.3 percentage points from July 2024.
- Retail inventory levels are currently at 2.19 million units, a 28.4% increase from July 2024.
- The industry’s inventory days of supply is 60 days in July, up from 49 days a year ago.
- The average new-vehicle retail transaction price in July is expected to reach $45,063,up $938 from July 2024. Transaction price as a percentage of MSRP increased to 89.6%, down 0.5 percentage points from a year ago.
- Retail buyers are on pace to spend $49.8 billion on new vehicles, up $5.0 billion from July 2024.
- Average incentive spending per unit in July is expected to rise to $3,051, up $52 from July 2024. Spending as a percentage of the average MSRP is expected to decrease to 6.1%, down 0.1 percentage points from July 2024.
- Average incentive spending per unit on trucks/SUVs in May is expected to be $3,257, up $108 from a year ago, while the average spending on cars is expected to be $2,043, down $341 from a year ago.
- Leasing is expected to account for 22.0% of sales this month, down 2.1 percentage points from a year ago.
- The average time a new vehicle remains in the dealer’s possession before sale is expected to be 50 days in July, up from 47 days a year ago.
- 29.6% of vehicles sold in less than 10 days in July, down 2.8 percentage points from a year ago.
- Average monthly finance payments are on pace to be $742, up $12 from July 2024. The average interest rate for new-vehicle loans is expected to be 6.54%, down 0.30 percentage points from a year ago.
- So far in July, average used-vehicle retail prices are $29,514, up $896 from a year ago. Trade-in equity is trending towards $7,894, which is down $4 from a year ago.
- 25.5% of trade-ins are expected to carry negative equity this month—an increase of 1.9 percentage points from July 2024.
- Finance loans with terms greater than or equal to 84 months are expected to reach 11.6% of finance sales this month, up 2.7 percentage points from July 2024.
Electrification outlook
Tyson Jominy, senior vice president of data and analytics at J.D. Power:
“The electric vehicle (EV) market is experiencing a sharp uptick in demand as consumers rush to take advantage of the $7,500 federal incentive before it expires Sept. 30. July marks the first month of this surge, with EVs projected to hit 10.9% retail share, up 1.9 percentage points from June. It’s also the first time this year that the segment has reached double digits.
“Despite the momentum, inventory constraints may soon emerge. June ended with 213,000 EVs in dealer stock, representing a 65-day supply. However, with automakers anticipating a slower fourth quarter, reducing imports due to tariffs, and ramping up marketing and incentives, top EV models could soon become scarce.
“Interestingly, this EV sales burst has not cannibalized hybrid demand. Traditional hybrid share is forecasted to be 13.9% this month—flat from June—but up 2.9 percentage points from July 2024. Meanwhile, plug-in hybrids are benefitting from similar dynamics as EVs, with share forecasted to end at 2.2%, up 0.2 percentage points from a year ago.”
Global sales sutlook
David Oakley, manager, Americas vehicle sales forecasts at GlobalData:
“June global light-vehicle sales in June increased 1.1% year over year to 7.7 million units, with most regions showing year-over-year growth. The selling rate finished at 91.9 million units, up from 90.0 million units in May.
“China, Japan, Korea and South America delivered the most significant contributions to year-over-year sales increases in June, but the gains were kept in check by declines in the United States and Europe. In China, pent-up demand helped to fuel growth in sales, as there is a sense that economic uncertainty is easing. Meanwhile, aggressive pricing strategies by Chinese manufacturers are helping stimulate demand within China, even as the trade war creates the potential for lower sales of Chinese brands in some overseas markets.
“July sales are expected to increase 2.1% from July 2024. China and Japan are once again likely to provide the largest year-over-year sales increases. Consumer spending is rising in China, and the automotive sector is seeing further incentives and free upgrades to provide more value to buyers without increasing pricing. There could also be some modest year-over-year gains in Europe this month, but the increase would be partly attributable to weak 2024 sales. The global selling rate is projected to reach 91.3 million units in July, up from a rate of 90.0 million units in July 2024.
“The trade war shows no signs of reaching a conclusion, with the Trump administration threatening further tariffs on various countries in recent weeks. Still, resilience in China and some emerging markets should allow for total 2025 global sales to grow 1.4% year over year, to 90.0 million units.”
SOURCE: J.D. Power
