New-vehicle car sales across major brands dropped sharply in early 2026, reversing much of the momentum built up during last year’s pre-tariff buying surge. Ford fell nearly 10% in Q1, Honda posted its third straight quarterly decline at nearly -5%, Mazda’s April sales plummeted over 17%, and Subaru extended its losing streak to nine straight months.

The pullback in new car purchases from automakers reflects a combination of factors frequently cited in automotive news: a rough comparison to an artificially elevated 2025 baseline, average new-vehicle prices still hovering near $50,000, elevated costs of borrowing, and rising gas prices. For millions of drivers who are holding onto their current vehicles longer as a result, that decision can also come with financial implications worth understanding before something goes awry.

What the Numbers Look Like Brand by Brand

The first quarter of 2026 was rough for most auto companies across the board, including luxury brands like BMW and Acura, but the specifics vary from company-to-company. Ford took the hardest hit among domestic brands with Q1 sales falling 8.7%, partially driven by their F-Series, America’s best-selling vehicle, sliding 16% year-over-year.

Toyota was a relative winner, with the Toyota brand essentially flat in Q1. Its luxury division, Lexus, fared worse, posting double-digit declines. Combined, Toyota Motor Corporation deliveries in April fell 4.6% year-over-year. The RAV4, one of their most popular vehicles, faced a significant crunch as Toyota has transitioned to a redesigned model, while a safety recall on the Prius hybrid added more disruptions across dealerships.

Honda recorded an unfortunate 4.2% decline in Q1, making it their third consecutive quarter of drops. The CR-V, HR-V, and Civic all posted lower year-over-year numbers, though the company’s hybrid lineup actually set a record which potentially signals where consumers interest is heading.

Subaru has seen a particularly rough stretch, with Q1 deliveries off 15% after eight straight months of year-over-year declines—a streak that extended to nine consecutive months with April’s 5.9% drop. Only the Forester and Solterra seem to be relatively insulated in positive territory thus far in 2026.

Mazda reported a 17.3% decline in April alone, with year-to-date sales being down 15.1%. Production decisions including scaling back output of Mexico-built models to avoid tariff exposure partly explain the steep drop, but the overall trend reflects broader demand softness.

Finally, Hyundai and Kia held up better through most of Q1, with Kia actually posting six consecutive quarters of growth. Hyundai managed to achieve its strongest Q1 ever. Even they were not immune to the widespread industry issues completely though. Hyundai saw a slip of nearly 2% and Kia fell roughly 3% in April, with both citing a tough comparison between now and the pre-tariff rush of last year.

Why the Decline: Pre-Tariff Pull-Forward and Affordability Pressure

The single biggest factor that has distorted 2026 numbers in the auto space is the comparison baseline. March 2025 delivered a seasonally adjusted annual rate of 17.9 million units as buyers rushed purchases ahead of anticipated tariff-related price hikes. This surge effectively borrowed demand from the future which is visible in Q1 of 2026.

The impact of Trump-era tariffs on the auto industry goes beyond demand pull-forward though. With a 25% tariff on imported vehicles still in effect, automakers face higher input costs that are flowing down to the sticker price. The average new-vehicle transaction price remains near $50,000, which is a level that has meaningfully compressed the pool of buyers who can absorb both the price and current financing rates.

Fuel costs have added another layer of pressure too. Rising gas prices are a recurring theme in buyer surveys, particularly for those interested in larger vehicles. The loss of federal EV tax credits has further reduced the affordability of the market. The net result of all of this is that the market will be running at a 15.8 million unit annual pace, down about 2.6% from 2025. Rest assured, though, that this figure represents more of a correction as opposed to an industry collapse.

What This Means for Used Car Owners

When fewer people buy new vehicles, the ripple effect moves through the entire market. A buyer who might have traded up, for instance, may stay put instead. Owners who planned to sell might hold. This ultimately increases the average age of vehicles on roadways; a fact that matters more than you may think.

Age and mileage are two of the primary drivers of mechanical risk. Factory warranties often expire after three to five years or 36,000 to 60,000 miles. A driver who purchased a vehicle in 2019 and planned to trade it in around 2025 or 2026 may not be holding onto a car that’s well past its warranty period. As vehicles age and accumulate mileage, repair needs may become more common.

Tariffs are also affecting the used car market though. Limited new vehicle supply tends to push used car prices up as well, making it more expensive to trade into a replacement vehicle.

The Ownership Cost Connection

Paying off a car doesn’t just reset your financial equation either. According to AAA’s 2025 Your Driving Costs study, the average annual cost of car ownership runs roughly $11,577 or nearly $1,000 a month. That figure accounts for factors such as fuel, insurance, registration, and maintenance. It doesn’t account for the extra risk of major mechanical failures that arrive without warning from letting your car age.

Something as major as a transmission replacement can cost between $5,892 and $6,402, and an engine replacement can run anywhere from $4,000 for a remanufactured unit to more than $10,000 for certain models. While these repairs are rare even simple repairs can have costs ranging from a couple hundred to a couple thousand. If you’re holding a car that’s well past its factory coverage, whether by choice or due to the economics of the industry, repair costs may become the owner’s responsibility once factory warranty coverage expires.

An extended warranty or vehicle service contract (VSC) may help address some of these repair-cost concerns and help drivers “automate” their budget for certain repair costs. The average cost of car ownership includes a predictable monthly spend, but unplanned major repairs don’t fit neatly into your budget. A VSC may allow some drivers to exchange the possibility of certain large repair expenses for contract payments over time.

The coverage plans offered by Endurance Warranty Services are designed to help cover certain repair costs at varying mileage levels and ages, including vehicles that have already exceeded their factory warranty. For any driver navigating the real cost of car tariffs and how warranties help, a vehicle service contract may be worth considering for drivers concerned about unexpected repair expenses.

Auto Protection That Matters

The 2026 sales slowdown in the auto market isn’t a blip. Ongoing affordability issues, policy uncertainty, and a consumer base that has reset its expectations on when or if to buy new are all playing long-term roles. With many drivers choosing to wait to buy, there’s a carrying cost that may appear when broken down on the side of the road or at a repair shop.

To explore coverage options for your specific vehicle, visit our vehicle guides or contact an Endurance representative at (800) 253-8203 to request a FREE quote. You can also see your price and plan recommendation through our convenient online store.