Affordability pressure is changing which used vehicles shoppers can finance, and dealers need the right mix heading into Q4. On today’s edition of CBT Live, Derek Hansen, Senior Vice President of Dealer, Lender, and Inventory Management Solutions at Cox Automotive, broke down where used demand stands and what dealers should do about it.
Hansen believes that the 2026 used market has been resilient, but notes that demand is shifting toward vehicles customers can comfortably finance. New-vehicle sentiment has softened as the average new car price crossed $50,000 again, and longer loan terms are doing more of the affordability work, pushing shoppers toward late-model used vehicles, which are scarce because automakers built fewer cars in 2021, 2022 and 2023 during the pandemic, Hansen said.
Total inventory matters less than having supply in the fastest-moving price bands, which are also the scarcest and hardest to source at auction. That has dealers turning to their service drives and CRMs for cars. Dealers who connect those departments and build a workflow their teams can support can add a couple thousand dollars of gross margin per car, Hansen said.
Over the next 30 days, dealers should rebalance inventory toward the price bands that are moving and activate service drive and CRM sources, Hansen said. They also need to protect turn on vehicles outside those bands, with pricing and merchandising that tell the affordability story.
