According to the recent Cox Automotive forecast, sales volume in January is projected to reach 1.125 million, a 25.3% drop from December but a 5.2% increase compared to January 2024.

Cox Automotive forecasts January’s seasonally adjusted annual rate (SAAR), or sales pace, to be 15.8 million, an increase from 15.0 million last year, though a decrease from December’s surprisingly strong 16.8 million. At 15.8 million, this would represent the highest January SAAR in three years.

According to Senior Economist Charlie Chesbrough at Cox Automotive: “New-vehicle sales have been strong since the election, but they are expected to moderate slightly this month. Sales pace in November and December were at the highest levels we’ve seen since the spring of 2021, but a dip this month is likely.”

“January is generally one of the slowest months of the year for vehicle sales,” Chesbrough added, “so a large decline from December is normal. However, severe weather across the country, along with the fires out west, will negatively affect consumer activity, though the extent is uncertain.”

According to an analysis of vAuto Live Market View data, the total U.S. supply of available unsold new vehicles at the start of January stood at 2.88 million units, marking the first time it registered below 3 million since the end of October. This decline in inventory levels indicates a tightening supply situation in the market. However, inventory and incentives remain higher than they were a year ago, suggesting that dealers still have sufficient inventory and are offering deals to entice buyers.

After finishing 2024 at just over 16.0 million units, according to the Kelley Blue Book estimates, Cox Automotive is forecasting new light vehicle sales to continue to improve modestly in 2025, reaching 16.3 million by year’s end. Positive economic growth coupled with improved buying conditions should lead to a 2%-3% gain. However, policy changes regarding tariffs and electric vehicle tax credits from the Trump administration could have negative effects on the outlook, particularly in the second half of the year.