Emmaline Aliff sits down with Cox Automotive Chief Economist Jeremy Robb to unpack the forces reshaping today’s auto market—from affordability pressures and credit expansion to the growing wave of used EVs. As consumers navigate rising costs and lenders adapt to shifting risk, the conversation explores what’s really driving demand—and what dealers and lenders should watch next.

In this episode:

What is driving the current auto market in 2026?

The auto market is being shaped by a mix of macroeconomic forces, including inflation, interest rates, tariffs, and consumer affordability challenges. At the same time, credit availability is expanding, creating a complex environment where demand persists despite financial pressure.

What is a K-shaped economy and how does it impact auto buyers?

A K-shaped economy means higher-income consumers are thriving while lower-income consumers face increasing financial strain. In the auto market, this results in strong demand for high-end vehicles while affordability challenges push many buyers toward used cars—or out of the market entirely.

Why is affordability such a major issue in the auto industry right now?

Affordability is being impacted by rising vehicle prices, higher interest rates, increased insurance costs, and ongoing inflation. These combined factors are making it harder for many consumers to purchase or finance a vehicle.

How is credit availability increasing despite consumer financial pressure?

Lenders are expanding access by offering longer loan terms, financing lower down payments, and taking on more subprime risk. While this increases access to credit, it can also introduce additional long-term financial strain for consumers.

What should dealers and lenders watch for in the second half of the year?

Key indicators include interest rate changes, inflation trends, mortgage activity, and continued consumer demand. Lower rates and improved economic conditions could unlock stronger sales.