On the Dash:
- Regular gas reached $4.48 per gallon and the Fed raised rates, which pushes shoppers to weigh total ownership costs more closely.
- New hybrid sales have risen 24% year to date, while used 2026 RAV4 Hybrids list at 116% of new MSRP, so dealers need to manage hybrid inventory and pricing carefully.
- Used EV inventory rose 60% year over year while prices fell only 5%, which gives dealers room to move used EVs priced below $32,000.
CarGurus released its Q3 Quarterly Review today, revealing that higher fuel and borrowing costs are prompting shoppers to reassess the total cost of vehicle ownership. While regular gas prices averaged $4.48 per gallon nationwide on Sept. 24, the highest AAA has recorded for that time of year, the Federal Reserve raised its benchmark interest rate by a quarter point on Sept. 16, its first increase since 2023. Auto loan rates could follow as Treasury yields climb and the Fed’s decision works its way through the market.
Against that backdrop, interest in hybrids and EVs increased again in the third quarter, feeding a K-shaped market where demand runs strongest for lower-priced and high-end vehicles while mid-priced models face greater affordability pressure. New hybrid sales have risen 24% year to date, making hybrids the only mainstream powertrain with sales growth in 2026, and used hybrid sales have climbed nearly 33%.
Pricing pressures
According to the review, top new hybrids remain relatively affordable, with average prices ranging from $34,200 for the Ford Maverick to $41,300 for the Toyota RAV4. Toyota leads the segment with 47.2% of new hybrid sales and holds four of the top five spots among best-selling new hybrids. Limited inventory keeps supply tight, with the RAV4 at 15.6 days, the Grand Highlander Hybrid at 16.0 days, the Sienna at 17.3 days and the Camry at 21.7 days. Hybrids now outsell gas versions of several models, including the Toyota Highlander, Grand Highlander and Ford Maverick.
That demand is also squeezing prices as buyers compete for limited inventory. Used 2026 RAV4 Hybrid listings average 116% of the new 2026 manufacturer’s suggested retail price (MSRP), or about 16% above the new price, which shows buyers value immediate availability and lower fuel consumption.Â
New and used EV markets
New EVs, in contrast, have struggled, as sales have fallen 48% year to date, excluding direct-to-consumer EV brands. New EV inventory dropped 34% year over year in September, and the average new EV list price fell 15%. Even so, days’ supply for new EVs has climbed 82% from its post-tax-credit low. Supply varies widely by model, with the Toyota bZ at 37.6 days, the Hyundai Ioniq 5 at 55.0 days and the Chevrolet Equinox EV at 118.2 days.
Meanwhile, the used EV market is showing stronger demand as off-lease vehicles return to inventory. Used EV inventory rose 60% year over year in September, while average prices fell just 5%, and days’ supply has increased 36% from its post-tax-credit low. Shoppers show particular interest in used EVs priced below $32,000, such as the Tesla Model 3, which averages $24,900 and turns in 30.4 days, and the Tesla Model Y, which averages $32,100 and turns in 28.3 days. These figures suggest the used market is absorbing extra EV inventory more steadily than the new market, and that EV demand stays strong when prices align with consumer budgets.
Overall, consumers increasingly weigh purchase price against ownership costs, with some choosing hybrids for efficiency and reliability and others finding value in used EVs as more inventory arrives. Powertrain choice has become a significant part of the affordability equation rather than merely a matter of personal preference, and future changes in borrowing costs could further influence how much consumers will spend on monthly payments.
