Q1 2026 US Auto Sales Soften: SAAR Drops to 16.0M

I've been telling people to wait for leverage to swing back to the buyer, and Q1 finally delivered it. US new-vehicle sales softened more than most analysts expected — S&P Global Mobility put March 2026 retail at roughly 1.37 million units, a 16.0 million seasonally-adjusted annual rate (SAAR). That's in line with February's 15.8M but well off the 17.9M pace from March 2025. The first quarter closed about 7% below last year. In plain terms: this is the first real buyer's market the US has seen since 2019, and I want you to use it.

What changed

A few things hit at once. Affordability got worse — average transaction prices held within $200 of 2025, but financing got more expensive as average new-loan rates climbed back above 7% in February, and down payments crept up, pushing marginal buyers out.

On the demand side, three trends matter:

• EV demand cooled after the Section 30D credit ended for vehicles acquired after September 30, 2025. EV share dropped from 9.4% in Q4 2025 to 7.6% in Q1 2026.
• Pickup demand softened unusually fast, especially full-size — days-supply on F-150, Silverado 1500, and Ram 1500 crossed 90 days for the first time since 2020.
• Used demand picked up the slack, with used SAAR closer to 2024 levels even as new sales fell.

On the supply side, automakers are still building at near-capacity and have been slow to adjust, so inventory is rising across most segments. That's the whole ballgame for your negotiating position.

Where days-supply landed in March

Tight is 60 days or less; 90-plus starts forcing real incentive spending. Here's the end-of-Q1 picture:

Segment	March 2026 days-supply	Vs March 2025
Full-size pickup	92	+28
Mid-size pickup	78	+12
Full-size SUV	89	+18
Mid-size SUV	71	+10
Compact SUV	62	+5
Compact car	54	-3
Mid-size sedan	67	+9
EV (all classes)	113	+47

Three things jump out at me. EV inventory now towers over every other segment. Pickups have ballooned more than any other ICE segment — that's where the deals are. And compact cars (Civic, Corolla, Sentra) are actually tighter than a year ago, because automakers gutted compact-car production from 2022 to 2024 and demand came back faster than supply. Don't expect to steal a Corolla.

What it means for buyers

Three practical effects:

1. Cash on the hood is climbing. Manufacturer cash averaged $3,612 per vehicle in March, up from $2,840 a year ago. Pickup cash crossed $5,000 for the first time since 2020.
2. Lease deals got sharper. Captive lessors cut money factors on most luxury and mainstream programs in February and March. Lease penetration hit 26% of sales, up from 23%.
3. Negotiation works again. From 2021 through 2024, most popular vehicles sold at or above MSRP. In March, the average transaction landed roughly class="relative z-10",800 below MSRP. If you walk in with research and patience, you have real leverage for the first time in five years — and I'd press it.

What's coming in Q2

Most forecasters expect Q2 to look like Q1. The 16.0M SAAR is widely seen as the new normal until rates ease or the economy steps up. A few things could move it: rate cuts later in the year would loosen affordability, new launches (the refreshed RAV4, the new Outback, the updated CR-V) could pull people into showrooms, and manufacturer-funded financing — creeping back for the first time in three years — could close some of the gap.

For now, if you've been waiting for a buyer's market, this is exactly what one looks like. Go shopping.