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February Sales Up, Consumer Confidence Down

Inventory, tax refunds and bonuses encourage buyers trying to avoid higher prices later.

March 14, 2025
February Sales Up, Consumer Confidence Down

Vehicle purchase plans are at their lowest level since last February, Cox Automotive says.

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2 min to read


It’s a good thing it’s tax refund and job bonus season, because U.S. consumers aren’t exactly in a big-spending mood.

As measured by the University of Michigan Index of Consumer Sentiment, their confidence continued to wane in March for a third straight month of declines. 

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The index fell 11% from February to 58, down 27% year-over-year. It declined among consumers of all ages, education and income levels, wealth, political affiliations and regions of the country.

“While current economic conditions were little changed, expectations for the future deteriorated across multiple facets of the economy, including personal finances, labor markets, inflation, business conditions, and stock markets,” said Surveys of Consumers Director Joanne Hsu. 

“Many consumers cited the high level of uncertainty around policy and other economic factors; frequent gyrations in economic policies make it very difficult for consumers to plan for the future, regardless of one’s policy preferences.”

A bright spot in the market came with nearly a third of income tax refunds issued by mid-February, according to Cox Automotive, which noted that the average refund is up 7% this year. 

Meanwhile, workers who receive annual bonuses typically get them in the first quarter, another potential boost for purchases of cars and other more expensive products, Cox pointed out. 

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A combination of the new trade tariff war and inflated prices on vehicles and other goods is dampening consuming, though, “leading to the lowest level of vehicle purchase plans since last February,” Cox said.

February new-vehicle sales, in pre-trade war conditions, made for about a 14% month-over-month sales pace bump. The activity was spurred in part by plentiful inventory, said Cox, which estimated supply at about three million units by month’s end, up 2% from January.

“With greater inventory availability, dealers had market confidence, and consumers had plenty of options when choosing a new vehicle,” Cox said in its report.

Many consumers may be taking advantage of the season to make big purchases before prices could rise due to trade tariffs.

“While concerns about future price increases may be driving more customers to the showroom, uncertainties in policy changes are creating challenges for automakers as they await further information,” Cox said.

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