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Driven by record electric vehicle (EV) sales, US new-car deliveries are expected to marginally increase in the country during September, continuing an upward trend. However, the overall picture is far from straightforward. In its latest forecast, J.D. Power unpicks the data.
Total new-vehicle sales in the US, including retail and non-retail transactions, are projected to reach 1,232,200 in September. This marks a 0.1% year-on-year increase according to the latest forecast from JD Power.
September 2025 has 24 selling days, one more than the same month last year. Comparing the same sales volume, without adjusting for the number of selling days, translates to an increase of 4.5% from 2024.
The seasonally adjusted annualised rate (SAAR) for total new-vehicle sales is expected to be 16.2 million units, up 0.3 million units from September 2024.
New-vehicle retail sales are projected to reach 1,031,400 in September, a year-on-year upswing of 0.4%. Comparing the same sales volume, without adjusting for the number of selling days, translates to an increase of 4.8% from 2024.
‘In aggregate, September sales results point to another month of strong demand for new vehicles,’ said Thomas King, president of the data and analytics division at J.D. Power. ‘However, as has been the case for the past few months, assessing the health of the industry requires a closer look at the underlying market dynamics.
‘The biggest driver of September’s strong sales pace is temporarily inflated demand for electric vehicles. The federal EV tax credit expires at the end of the month, which is causing many shoppers to accelerate their purchase.’
The electric vehicle (EV) retail share is expected to reach 12.2% in September. This is an increase of 2.6 percentage points (pp) compared with 12 months ago. In total, this equates to a 27.5% boost in EV sales, selling day-adjusted, from one year previous.
‘The second key driver is affordability,’ added King, ‘although again, the EV dynamic means aggregate results need careful evaluation. In totality, average vehicle prices continue to rise, discounts remain low and monthly finance payments are at record highs, all of which affects the overall sales pace.’
The average new-vehicle retail transaction price in September is expected to reach $45,795 (€39,087), up $1,310, or 2.9% from September 2024. The average manufacturer incentive per vehicle is on track to reach $3,116, an increase of just $24 from August, and a decrease of $3 from a year ago.
Expressed as a percentage of the manufacturer’s suggested retail price (MSRP), incentive spending is at 6.1%, a decrease of 0.2 pp compared with one year ago. Average monthly finance payments are on track to reach $756, an increase of $21 from September 2024, and the highest on record for that month.
In response, more buyers are opting for extended 84-month loan terms, which are expected to account for 11.0% of finance sales in September. This is the second-highest level on record for the month.
‘The decline in manufacturer incentive spending to just 6.1% of MSRP is notable, but more notable are the limited discounts offered on non-EVs,’ confirmed King. ‘Incentives as a percentage of MSRP for non-EVs fell to just 4.8% of MSRP in September, down 0.8pp from a year ago.
‘Collectively, these pricing dynamics are helping manufacturers preserve profitability amid tariff related cost pressure, but at the expense of higher sales volumes. Nevertheless, there are some positives for new-vehicle demand, most notably lower interest rates, stronger used-vehicle prices and improved loan availability.’
The average interest rate for new-vehicle loans in September is 6.51%, a decrease of 25 basis points (one basis point is equal to 0.01%) from 12 months previous.
‘The average used-vehicle price is trending towards $29,668, up $739 from a year ago,’ said King. ‘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.’
Rising used-vehicle prices are benefiting new-car buyers, with average trade-in equity climbing $534 year on year in September to $8,430. However, that gain is partly offset by larger outstanding loan balances on vehicles being traded in. As a result, the share of new-vehicle buyers facing negative equity is projected to hit 25.9%, up 1.5pp from September 2024.
‘Access to new-vehicle loans for buyers with weaker credit also appears to be improving. The percentage of buyers with sub 650 FICO scores is trending towards 14%, up 3.1pp from last year and the highest level for September since 2016 at 14.9%,’ King affirmed
‘The stable sales pace, combined with elevated average transaction prices mean consumers are on track to spend nearly $45 billion on new vehicles this month, 8.5% higher than a year ago and the second highest on record for the month of September.
‘Total retailer profit per unit, which includes vehicle gross plus finance and insurance income, is expected to be $2,240, up $12 from September 2024 and up $79 from August 2025. Total aggregate retailer profit from new-vehicle sales for this month is projected to be $2.2 billion, up 6% from September 2024,’ added King.
Looking ahead to October, EVs are expected to remain a defining factor in the US new-car market. However their impact on overall sales is likely to change direction.
‘A very significant decline in EV sales is expected for October,’ reflecting both the effect of the federal EV tax credit expiring and the start of payback from all the EV purchases that were accelerated into the summer,’ highlighted King. ‘The net effect will be heavily influenced by the extent to which manufacturers attempt to offset the loss of the federal EV tax credit, if at all.’
‘October sales will also be affected by manufacturers’ pricing and incentive decisions on non-EVs. The current low level of non-EV discounting provides plenty of potential for manufacturers to escalate incentives to bolster demand. However, tariff-related cost pressure remains significant, meaning the current pricing and incentive environment is likely to persist for much of the final quarter of the year,’ He concluded.
‘As the final month of the federal EV incentive draws to a close, EVs are on pace to exceed 12% in the US for the first time ever,’ confirmed Tyson Jominy, senior vice president of data and analytics at JD Power. ‘While this would mark another record, the absence of a significant end-of-incentive surge underscores the underlying softness in consumer demand for the technology.
‘Inventory remains the key storyline as the quarter winds down. Barring a significant final sales week, more than 163,000 EVs remain on dealer lots, with approximately 100,000 of those from legacy automakers. The looming question is, “What happens to this inventory in the final quarter of 2025?” With federal support expiring, manufacturers may be compelled to absorb some or all the lost value to maintain momentum.
‘In the context of the recently released J.D. Power 2025 U.S. Automotive Brand Loyalty Study, there is a bright spot. EVs from franchised automakers are showing 55% nameplate loyalty, outperforming the industry average by 6pp. This suggests that while the broader market may be hesitant, brand equity is still resonating with EV buyers.
‘PHEVs also affected by the tax credit changes, are seeing less disruption. Their 2.6% retail share is 0.5pp below the all-time high set in December 2024, indicating a more stable demand curve.
‘Meanwhile, HEVs continue to gain traction. Retail share stands at 13.8%, up 2.1pp from September 2024 and holding near record highs. This growth underscores the segment’s resilience, even as consumers adjust to the phase-out of the federal incentive for electric vehicles and plug-in hybrids,’ concluded Jominy.
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