“June sales are subdued, with the sales pace falling to its lowest level in the past 12 months. However, care needs to be taken when interpreting June results, as they are not fully indicative of the underlying demand for new vehicles” said Thomas King, president of the data and analytics division at J.D. Power.

“There are three critical factors to understand when evaluating June results. The first is that year-over-year comparisons are affected by a large dealer software outage event that limited many dealers’ ability to sell vehicles in June 2024. This event reduced retail sales by approximately 85,000 vehicles, meaning that year-over-year sales results appear considerably more favorable than they actually are.

“The second factor is payback from the tariff-related rush to showrooms in March and April of this year. In those months, approximately 173,000 extra vehicles were sold as buyers pulled purchases forward in anticipation of future tariff-driven price hikes. That pull-ahead effect has now become a payback effect, deflating June sales below the actual level of vehicle demand.

“The third factor is that while pre-tariff expectations were that discounts would rise during the course of 2025, they have actually fallen. Specifically, incentive spending expressed as a percentage of MSRP has declined from 6.1% in January 2025 to just 5% in June. This reflects the cost-pressure tariffs are creating for manufacturers, but it is also causing some shoppers looking for affordable vehicles to remain on the sidelines,” King said.