New vehicle sales in the US are expected to fall in the first quarter of 2026 due to affordability concerns, including high borrowing costs and vehicle prices. Industry expert Cox Automotive expects first-quarter sales to drop 6.5% from the previous year and annual sales to fall 2.6%. The loss of EV tax credits, elevated interest rates and increased oil prices have also contributed to this decline. The U.S.-Israeli war on Iran has exacerbated the strain, with rising oil prices threatening consumer spending. Electric vehicle sales are also expected to drop about 28% in Q1, with analysts predicting overall demand could be impacted if car prices stay high.