Auto Dealerships NAICS 441110

Mar 6, 2026 - Car Affordability Dragging Down Auto Sales

• Car affordability has become a major drag on US auto sales heading into 2026, with 52% of dealers citing the economy as a barrier to sales in Q1 2026 - up from 45% a year prior. A Washington Post/ABC News poll found 74% of Americans consider buying a new car unaffordable, unsurprising given the average new car price was $49,191 in January 2026. Monthly payments are also at record highs, with Edmunds reporting the average financed new car payment reaching $772 in Q4 2025 and one in five buyers now committing to $1,000 or more per month, contributing to Cox's projection that February 2026 vehicle sales will fall 3.4% year-over-year. Some relief may be on the horizon through lower interest rates and more off-lease used vehicles entering the market, though luxury brands like Porsche (averaging $128,761) continue pushing overall price averages upward.
• Car buyers paid over $26 billion in “destination charges” in 2025, according to Edmunds, with the average fee now sitting around $1,600 (up from roughly $1,200 in 2020). The charges, which are supposed to cover the cost of shipping a new vehicle to its buyer, have climbed steadily in recent years as fuel and logistics costs have risen. They now range from about $1,100 to over $2,600 depending on the vehicle, with the Ford F-150's charge alone jumping by $900 since 2020. Automakers including Ford and GM say the increases reflect rising transportation and business costs, though dealers and analysts suggest the fees have become a convenient way to offset tariff expenses without touching the advertised sticker price. Dealers are caught in the middle, fielding customer frustration over fees they don't set or control. A 2023 class-action lawsuit challenging the charges was dismissed last October.

• At the 2026 NADA Show, the National Automobile Dealers Association celebrated major regulatory wins from 2025, including the elimination of certain EV federal tax credits, the blocking of a proposed FTC retail‑scams rule, and limits on stricter state emissions waivers. Despite these successes, NADA stressed that advocacy remains essential in 2026, particularly in opposing the expansion of direct‑to‑consumer sales by automakers like Volkswagen’s Scout and Sony Honda Mobility, which the association says threatens the franchise dealer system that still handles the bulk of US new-vehicle sales. Dealers are also engaging with lawmakers on issues such as greenhouse-gas regulations, vehicle theft prevention, and tariffs. These efforts show how dealers are navigating a rapidly shifting landscape - responding to regulatory changes, evolving sales models, and rising competition - while protecting their traditional role in vehicle retailing.
• Auto dealerships are benefiting from buyers’ growing reluctance to haggle, with many shoppers effectively paying a premium for speed and certainty. Research shows consumers are willing to overpay by about $1,100 on a $20,000 vehicle to avoid negotiating, a dynamic that has become more lucrative as vehicle prices and borrowing costs rise. Dealers have leaned into email and online price quotes (about a quarter of buyers now start digitally before coming in) while still closing most sales in person, according to CDK. Pricing power has also shifted toward retailers: average discounts from sticker price have shrunk from roughly 12% in 2015 to under 5% recently, based on data from Edmunds. Even when sticker prices are less flexible, dealerships maintain leverage through financing terms, manufacturer-backed rate incentives, trade-in valuations and finance-office add-ons, all of which can materially shape the final profitability of a sale.