New-vehicle sales forecasts for January point to a continued slowdown that will extend pressures collision repair shops have been navigating since mid-2025.
Cox Automotive projects January's seasonally adjusted annual rate will finish near 15.3 million units, down from December's 16.1 million and slightly below last January's 15.5 million pace. J.D. Power's forecast is more conservative, projecting a 15.0 million SAAR, down 0.4 million units from January 2025.
Both forecasters cite the same underlying factors: the September 2025 expiration of federal EV tax credits continues to drag on overall volume, consumers remain cautious about the economy, and new-vehicle prices stay elevated. Winter Storm Fern, which disrupted much of the country during the final weekend of January, likely slowed sales further.
For collision repair operators, slowing new-vehicle sales compound an already difficult volume picture. As Autobody News reported in December, industry data shows total claim counts fell 8.5% year over year through July 2025, with collision and comprehensive claims accounting for nearly 90% of that decline. Fewer new vehicles entering the market means the existing fleet continues to age, and older vehicles are far more likely to be written off after a collision.
Vehicle mix shift accelerates
J.D. Power's data shows the powertrain mix continuing to shift away from EVs. Electric vehicles are expected to account for just 6.6% of January retail sales, down 2.9 percentage points from a year ago. Internal combustion engine vehicles, meanwhile, have rebounded to 77.7% of sales, up 2.7 points. Hybrids continue gaining ground at 14.7%, up 1.4 points.
The shift has implications for shop certification priorities. EV collision claims hit a record 3.21% of repairable claims in the third quarter of 2025, according to Mitchell data, but that surge was driven by the tax-credit-fueled sales spike. With EV sales now running at roughly half their September pace, the growth trajectory for EV repair work has flattened.
Hybrid repairs, meanwhile, are becoming more common. Full-year 2025 sales results showed hybrid volumes surging across Ford, Toyota, and Hyundai, meaning more vehicles with dual powertrains and high-voltage battery systems will be arriving in shop bays over the next several years.
Tax refunds may provide near-term boost
Cox Automotive noted that larger-than-expected tax refunds could bring some consumers back to market in the coming weeks. For collision shops, that same dynamic could translate to customers with more cash available for deductibles or deferred repairs.
"Tax season may offer a small but meaningful bump for the auto industry," said Charlie Chesbrough, senior economist at Cox Automotive. "With larger refunds expected, some consumers who held off earlier in the year may finally have the means, and the confidence, to return to the market."
2026 outlook
Both forecasters project full-year 2026 sales will decline from 2025 levels. Cox Automotive is forecasting 15.8 million units, down from 2025's estimated 16.3 million.
"The key factors in assessing January's performance are the co-mingling of lower EV sales, higher incentives on internal combustion engine vehicles and ongoing profit pressure from tariffs," said Thomas King, president of OEM solutions at J.D. Power. "EV retail sales remain depressed as transaction prices jump through a combination of the elimination of federal credits and reduced incentives from manufacturers."
For collision repair operators, the outlook reinforces trends that emerged in 2025: fewer vehicles entering the repair stream, more complexity on the vehicles that do get repaired, and a vehicle mix that continues to shift.
