Last-minute electric-vehicle shopping to beat expiring tax credits, combined with this month's interest rate cut, brought the strongest third-quarter for U.S. new-vehicle sales since before the pandemic.
The two inspirations served to coax consumers who’ve been waiting for affordability aids amid auto price inflation that resulted from pandemic-era market disruptions, Edmunds said in its quarter forecast.
The automotive data and reviews provider puts sales up about 5% year-over-year to about 4.1 million units, though off the second quarter - when consumers rushed to beat expected tariff inflation - by 3%.
Most top automakers’ sales rose sharply year-over-year, especially Toyota, at a 17% bump, though Stellantis and Honda were essentially flat, according to Edmunds data.
"We're seeing more consumers return to the market with aging trade-ins, which is a strong signal that there's still real pent-up demand. People may have waited on the sidelines, but now they're coming back — tariffs or not," said Edmunds Head of Insights Jessica Caldwell in the forecast report.
"Despite concerns that tariffs would put serious pressure on new-vehicle sales, the third quarter held up surprisingly well," she said. "We haven't seen prices jump dramatically for consumers since automakers are doing what they can behind the scenes to offset those added costs."
Edmunds says the Federal Reserve’s quarter-point benchmark interest rate cut spurred sales at the end of the quarter, which was already fueled by EV buyers’ spending spree to lock in expiring tax credits.
Cox Automotive, though, reported that despite the interest rate cut, auto loan rates for new units have actually risen, the average up 75 basis point year to date.
The tax credits, of up to $7,500 per EV, will send ripple effects through the market for the rest of the year, according to the forecast, which estimates remaining EVs comprise about one of every 22 vehicles at dealerships that dealers will now need to find other ways to sell.
Consumers may now take advantage of 2025 units as 2026 versions now make up more than a third of supply at dealerships, said Edmunds Director of Insights Ivan Drury.
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