DETROIT – The strength of the U.S. automotive industry will face an early test this spring that has nothing to do with cars or trucks.
With tax season starting, industry experts are projecting that some Americans, many of whom have been priced out of the new vehicle market, will use anticipated higher tax returns to purchase a new or used vehicle.
Extra cash on hand could lend a needed boost to an industry that’s suffering from slowing vehicle sales — or it could reveal continued problems for the automotive industry with inflated prices and consumers still reluctant to spend on big-ticket items.
“Their new tax bill is actually going to be less, and they’re going to be getting more in their tax return. It’s going to be a little bit of a surprise, we think, for a lot of potential buyers out there,” said Cox Automotive senior economist Charlie Chesbrough at a recent auto analyst conference.
The average IRS tax refund is up 10.9% so far this season, compared to the same point in 2025, according to early filing data. As of Feb. 6, the average refund amount was $2,290, compared with $2,065 reported about one year prior.
