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 January 2026. This is a good proxy for the number of cars purchased by California residents.
Slump in Registrations Continued Through January. Seasonally adjusted new car registrations dropped 8 percent from September 2025 to December 2025. After growing just 0.3 percent from December to January, registrations are still 5 percent below the average level over the last couple of years. This multi-month slump could be a worrisome sign for California’s short-term economic trajectory.
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 January 2026 were 15 percent lower than in January 2020.