Auto Sales Are Rising, But Payment Certainty Is Under Pressure
US retail auto sales closed out 2025 on a stronger footing, even after a softer fourth quarter. According to new data from J.D. Power, full-year new vehicle retail volume increased by approximately 4 percent. On the surface, that points to a resilient market.
But sales volume alone does not tell the full story. While demand remains robust, affordability pressures are changing how transactions are completed at the point of sale. Buyers are stretching to complete purchases, which makes payment certainty harder to guarantee.
What Is Changing in the Auto Market in 2026
As 2026 begins, the auto market reflects a shift in how buyers are managing affordability. Average transaction prices remain elevated, monthly finance payments have reached record levels, and loan terms are extending further to keep deals moving.
At the same time, trade-in equity is declining and more buyers are carrying negative equity into new transactions. These dynamics allow sales to continue, but they also introduce greater payment fragility at checkout.
Sales Strength Does Not Eliminate Payment Risk
Rising sales volume does not automatically reduce transaction risk. In many cases, it increases it.
Buyers are qualifying through longer loan terms rather than increased cash flexibility. December data shows average monthly payments reaching $776, with 84-month loans accounting for more than 10 percent of financed sales.
When consumers stretch to afford a vehicle, even small disruptions can impact how and when payments are made. Down payments become harder to complete, split payments become more common, and timing matters more than ever.
Why Rising Auto Sales Do Not Reduce Payment Risk
Higher sales volume does not guarantee reliable payments. When affordability is tight, buyers have less margin for error. Any delay, return, or disruption at checkout has a greater impact on dealership cash flow.
In an environment where transactions are closing but financial flexibility is limited, payment reliability becomes just as important as approval.
Trade In Equity Is Shrinking the Margin for Error
Another critical factor is the decline in trade-in equity. Average trade-in equity has fallen year over year, while nearly 27 percent of buyers are now rolling negative equity into their next purchase.
When equity cushions disappear, dealerships have less ability to absorb payment issues. The first payment becomes more critical. Ensuring that funds settle as expected is essential to protecting cash flow.
Volatile Sales Patterns Increase Payment Timing Risk
The market also experienced demand surges in 2025 driven by tariff concerns and changes to federal EV incentives. These pull-ahead periods boosted sales temporarily, followed by slower months.
Operationally, this volatility increases exposure at checkout. Higher transaction volume in compressed timeframes can lead to returned payments, reconciliation delays, and funding uncertainty.
When margins depend on completion rather than volume alone, payment timing becomes a key risk factor.
How Dealers Can Reduce Payment Uncertainty in 2026
Payment protection, including check guarantee and ACH payment guarantee services, helps dealers ensure funds clear at the point of sale.
By guaranteeing payments, dealers can reduce exposure to returned checks and failed electronic payments, support predictable cash flow, and complete transactions with greater confidence even when affordability pressure is high.
Payment protection is not about assuming failure. It is about acknowledging the realities of today’s buying environment and reducing uncertainty when transactions are completed.
What This Means for Dealers Entering 2026
As 2026 begins, dealerships are closing deals in a market where affordability remains constrained. Buyers are more leveraged, loan terms are longer, and equity positions are weaker.
In this environment, protecting cash flow requires more than closing the sale. It requires confidence that the payment behind the transaction will clear as expected.
Frequently Asked Questions
CrossCheck helps dealers complete more transactions with confidence by guaranteeing payments and reducing uncertainty at the point of sale.
Source: https://www.jdpower.com/business/press-releases/jd-power-globaldata-forecast-december-2025