Dealers are navigating a fluctuating market amid off-lease supply, changing EV demand, and rising used-vehicle prices, all of which present new challenges. On today’s episode of CBT NOW, Edmunds’ Director of Insights, Ivan Drury, unpacks what’s driving the shift and what dealers need to know as 2026 rapidly approaches.
Edmunds recently reported that the average transaction prices (ATPs) for 3-year-old vehicles is trending slightly over $31,000, a 5% year-over-year jump. While multiple factors contribute to the rise, Drury points to the lag between new and used vehicles as the primary factor. Off-lease supply is the most significant source of used-vehicle inventory, but three years ago, leasing volumes were lower overall. Coupled with the lingering effects of the pandemic and semiconductor chip shortages, this has created a challenging market and rising prices.
During the third quarter, used vehicles lingered on dealer lots for about 41 days. This trend suggests that shoppers have more choices, particularly as new-vehicle incentives increase, giving consumers greater options.
"It is going to be harder to sell EVs... In the end, for the industry, it's a net positive. We removed a lot of the pricing games... and now it's purely selling on price and merit—not incentives."
Like used vehicles, EV prices have also surged In October, Edmunds reported that the ATP for EVs climbed to $65,000, a record high. The expiration of the federal tax incentives slowed sales, making it harder for dealers to move EV inventory, but it also eliminated the artificial demand those incentives created.
In 2023, new EV purchases slowed as consumers increasingly chose to lease. This trend sets the stage for a strong off-lease EV inventory in 2026. Drury predicts the used EV market will see greater vehicle availability, increased brand diversity and an expanded variety of model types.
Despite this year’s multitude of challenges, Drury emphasizes that the retail automotive market has shown remarkable resilience. Even with a Q4 slowdown, the industry is expected to finish at a 16.4 million SAAR—a strong performance.
While Edmunds hasn’t released its official 2026 forecast, Drury says that pent-up demand will likely fuel another exceptional year for dealers.
