As discussed in an earlier post, new car purchases can be a useful, timely economic indicator. Figure 1 below shows the statewide number of new car registrations from January 2018 through May 2025. This is a good proxy for the number of cars purchased by California residents.
Sharp Decline in May. Seasonally adjusted new car registrations dropped 10 percent from April to May. As result, May’s monthly total was the lowest since June 2024. Registrations have been unusually volatile over the last six months, with strong growth in December, March, and April, and substantial declines in January, February, and May. The pattern over the last few months could be due to consumers accelerating their car purchases in anticipation of tariffs on imported vehicles that went into effect in April. Despite those tariffs, however, new car prices still were holding steady through May.
Californians Still Buying Fewer Cars Than Before the Pandemic. Statewide new car registrations declined steadily for several years leading up to the COVID-19 pandemic. Like many other measures of economic activity, registrations plummeted in March and April 2020. Registrations rebounded substantially in the subsequent months but generally have remained below pre-pandemic levels. For example, registrations in May 2025 were were 8 percent lower than in May 2019.