Auto Market Weekly Summary – Cox Automotive Inc.

This edition of the Auto Market Weekly Summary includes updates on credit availability, consumer price inflation, producer price inflation, and retail sales, which held up in April better than the headlines suggest. Core spending last month showed resilience, even as gasoline station sales distorted the top line number. Auto credit continued its quiet march higher, although risk indicators moved deeper into record territory.

Bottom Line Up Front

April’s data offered a fresh look at inflation, with energy costs the dominant force. Gas prices were up 43% year over year, but more concerning may be the broadening of price pressures into services. The Core Consumer Price Index (CPI) came in stronger than expected in April and, with producer prices running at their highest year-over-year rate since December 2022, the pipeline for further price pressure remains wide open.

Markets took notice. The 10-year Treasury yield climbed back over 4.5% this week as investors priced in a more persistent inflation environment, and the 30-year mortgage rate remains elevated, creating ongoing affordability headwinds for consumers considering both homes and big-ticket purchases like vehicles. The path toward rate relief looks exceptionally difficult, even with the more hawkish disposition of the new Fed Chair. 

On the positive side, retail sales showed resilience in April, with core spending advancing despite the drag from higher fuel costs, and auto credit availability reached its highest level since June 2022, giving dealers a meaningful tool to bridge the affordability gap. The risk is that broadening inflation, rising yields, and sustained energy prices may erode consumer resilience before the back half of the year arrives.

Credit Availability

Auto credit access inched higher in April, with the Dealertrack Credit Availability Index climbing to its highest level in nearly four years. The month’s improvement was mixed across channels and lender types, but a sharp pullback in subprime lending weighed on the index.

• Among lender types, banks led for the second consecutive month while captives and credit unions pulled back. Channel performance was similarly mixed, with most segments improving but All Used and Franchise Used pulled credit back modestly.
• Subprime lending retreated sharply from March’s multi-year high, though the subprime share remains significantly elevated year over year, with narrowing yield spreads and longer loan terms offsetting the drag.
• Risk indicators remained elevated: loan terms reached a new high, surpassing February’s previous record. Negative equity eased slightly from March’s all-time high, but remains elevated year over year, and down payments declined both month over month and year over year.

Consumer Price Inflation

April’s consumer price data confirmed that energy-driven inflation continues to build. Last month, year-over-year inflation was at its highest point in nearly three years. Core pressures also proved more stubborn than expected, suggesting the path to the Fed’s 2% target has grown longer.

• Consumer prices rose 0.6% month over month, in line with expectations and a slight deceleration from March. Prices were higher by 3.8% over the last year, the highest reading since May 2023.
• Core CPI, excluding food and energy, was higher by a more modest 0.4% against March levels, but that was a stronger reading than expected. Core CPI is higher by 2.8% against April 2025, the highest reading since last summer.
• The energy component of CPI was higher by 3.8% month over month, a moderating but still elevated rate, following the sharp 10.9% increase in March. As of April, energy prices are 17.9% higher against last year.
• Electricity prices rose by 2.1% month over month and are higher by 6.1% against last year, an important measure as AI data centers consume vast amounts of electricity. 
• The shelter component of CPI rose in line with the index overall at 0.6% month over month, but that was a significant increase from the March rate of 0.3%.

Producer Price Inflation

Producer prices increased sharply in April and were higher than expected across all major measurements. Producer prices for services surged to the highest levels since March 2022. Energy prices remained high, but the rate of growth decelerated from March levels.

• The Producer Price Index rose 1.4% in April, with a surge of 1.2% in services prices, a full point above the change seen in March and the highest level seen in over four years. The market had expected an increase of 0.5%.
• On a year-over-year basis, producer prices are now up 6%, the largest 12-month advance since December 2022.
• Energy goods were the primary driver of the broad increase in prices, higher by 7.8% in the month after increasing 10.1% in March.
• Diesel fuel was a notable contributor, rising 12.6% in the month and now higher by almost 74% year over year. In future months, the rise in diesel will likely contribute to a host of increases in product costs given the impact on transportation and delivery. 
• The report also cited jet fuel, higher by 36.4% month over month, and gasoline, up 15.6%, as components adding to the rise for the month.

Retail Sales

April retail sales held up despite a headline boosted by surging gasoline prices, suggesting the underlying consumer spending picture remains relatively resilient heading into summer.

• Total retail and food services sales rose 0.5% month over month in April to $757.1 billion, up 4.9% year over year, an acceleration from recent months.
• Gasoline station sales drove much of the headline sales gain, rising 2.8% in April following a 13.7% surge in March. Excluding gas stations, sales rose a more modest 0.3%.
• Core sales (excluding autos and gas stations) rose 0.5%, with gains led by electronics and appliance stores (+1.4%), sporting goods and hobby stores (+1.4%), and non-store retailers (+1.1%).
• Motor vehicle and parts sales fell 0.4% in April.
• Tax refunds appear to have provided support to spending through March and April, offsetting the drag from higher energy prices. But with refund season largely fading in the rearview mirror and gas prices still rising, that tailwind is fading.