NADA Market Beat: New Vehicle July Sales Solid But Finished Below Expectations

Tysons, Va.—New light-vehicle sales in July 2026 reached a SAAR of 16.3 million units, down 1.4% year over year. Sales for July were solid but finished slightly below expectations for a flat sales month year over year. The year-to-date SAAR through July 2026 totaled 16.0 million units, a decline of 2.2% compared to the same period last year.

Conventional hybrid vehicles continue to be popular sellers. Hybrid sales in July 2026 increased by 19.6% compared to July 2025. Through the first seven months of this year, hybrid sales rose 20.5% compared to the same period last year. Hybrids represent 15.4% of all new vehicles sold so far this year, an increase of 2.9 percentage points of market share year over year. Battery electric vehicles (BEV) continue to post year-over-year declines in sales, following the expiration of the federal EV tax credits in September 2025. We believe current BEV sales are representative of true market demand. Year to date through July, BEV market share totaled 5.9%, a decline of 1.9 percentage points.

JD Power estimates that the average monthly payment for a new-vehicle finance contract in July 2026 will total $808, an increase of 3.3% year over year and the highest ever for any July. OEM incentive spending increased in July, and JD Power estimates that average incentive spending per unit will total $3,451—an increase of 8.1% year over year. The jump in incentive spending likely would have been lower, but OEMs pulled back on incentive spending during summer 2025 to help offset tariff costs. Auto loan interest rates have cooled ever so slightly. JD Power estimates the average interest rate on a new-vehicle finance contract will total 6.54% in July, a decline of just 7 basis points year over year.

Looking out to the rest of the year, NADA states it doesn’t expect much relief for auto loans as inflationary pressure throughout the economy push up prices faster than the Fed would like to see. NADA doesn’t expect the Fed will cut interest rates in the remaining months of 2026, and there is even a chance the Fed may increase interest rates. Despite this headwind, NADA expects a solid year for new light-vehicle sales in 2026. Its full-year forecast remains at 16.0 million units.

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