New data from J.D. Power and GlobalData indicates that U.S. new-vehicle retail sales in May will reach 1.2 million units, which would be a 1.1% increase from May 2024 as the auto market stabilizes following a tariff-driven surge earlier in the year.
Total new-vehicle sales—including fleet and retail—are expected to hit 1,489,800 units, translating to a 3.4% year-over-year increase when adjusted for the additional selling day in May 2025. The seasonally adjusted annualized rate (SAAR) stands at 15.6 million, slightly down from 15.7 million a year ago.
“The strong sales pace, combined with high average transaction prices mean consumers will spend more money buying new vehicles this month than any other May on record—and the fourth highest of any month on record,” said Thomas King, president of the data and analytics division at J.D. Power.
King noted that around 149,000 vehicles were sold in March and April by buyers seeking to beat potential price hikes due to tariffs, which has softened May’s growth. Despite this, consumer spending on new vehicles is projected to reach a record $53.8 billion for the month—up 7% from May 2024.
Average transaction prices have stabilized at $45,462, a 1.4% increase from last year but a 1.3% decrease from April 2025. Incentives have fallen to $2,563 per unit, down $143 from a year ago, while retailer profit per unit has grown to $2,502, up $98 year over year.
Higher prices are pushing monthly finance payments to new heights. The average payment reached $748 in May, the highest on record for the month, up $21 year over year. Interest rates on new loans average 6.93%, a slight dip from last year.
Electric vehicle (EV) retail share declined to 8.1%, marking a 0.4 percentage point drop. In contrast, hybrid electric vehicles (HEVs) saw a 4.3 percentage point jump to 14.8% of the market.
“The electric vehicle segment is facing a notable downturn this month,” said Tyson Jominy, senior vice president of data and analytics at J.D. Power. “However, the broader electrification trend tells a more nuanced story,” citing a surge in hybrid offerings by automakers like Toyota and Honda.
Fleet sales declined 7.0% year over year, totaling an estimated 254,069 units, as manufacturers continue to prioritize retail channels. Meanwhile, trade-in equity rose $415 to $8,292, and used-vehicle prices increased modestly to an average of $29,168.
Although tariffs have not yet significantly impacted consumer prices, manufacturers are cautious. “For the industry, the current tariffs on imported vehicles and vehicle parts will increase the manufacturers’ cost of the average vehicle by $4,275,” King said, noting variability by automaker and model. Some pricing adjustments are expected as early as June or July, with broader impacts likely felt by year-end.
Globally, light-vehicle sales rose 6.0% year over year in April to 7.3 million units, with May projected to increase 4.6% from the previous year. Recent U.S.–China tariff reductions may ease global trade tension temporarily, though economic uncertainties remain.
Despite near-term headwinds, including consumer pull-forward and tariff ambiguity, industry leaders remain optimistic about demand resilience through 2025.
