Used Car Dealers NAICS 441120

Apr 9, 2026 - A Wave of Off-Lease EVs to Flood the Used Car Market in 2026

• A massive wave of off-lease EVs is about to reshape the used car market, with returns projected to exceed 300,000 units in 2026, a more than 200% year-over-year increase, per ACV Auctions. By 2027, gas-powered vehicles' share of lease maturities will drop from 90% to 72%, according to Car Dealership Guy. Dealers who lean into used EV inventory stand to capture a growing segment of value-focused buyers; those who don't risk surrendering margin and market share to competitors who will. Layered on top of this is tariff-driven pressure on new vehicle prices, which is pushing more buyers into the used market and tightening supply further. Carfax reports average used vehicle prices rose 1.7% in March alone, with some regional segments climbing more than $1,000 in a single month. The dynamic that shows little sign of easing as long as new-car affordability remains stretched.
• CarMax, the nation’s largest used car retailer, is shaking things up by bringing in hotel-industry veteran Keith Barr to lead a turnaround starting in March. The company has struggled with stagnant sales since 2022 and falling behind digital rival Carvana, which is now closing in on overtaking it in retail vehicle volume. To counter the slump, CarMax recently cut prices, ramped up marketing, and trimmed hundreds of jobs, yet quarterly sales still fell 8% year-over-year. Barr, former CEO of InterContinental Hotels Group, is known for revamping digital platforms and improving customer experiences, skills he plans to apply to CarMax’s app and website. By streamlining its online and dealership operations, he hopes to boost digital sales and make buying a used car less confusing, all while leveraging CarMax’s vast national footprint and high consumer trust to fend off competitors and reinvigorate growth in the crowded used-car market.

• Affordability pressures weighed heavily on the used car market in 2025, with Edmunds data showing buyers increasingly stretched by high prices and financing costs. A record 6.3% of used car buyers committed to monthly payments of $1,000 or more in the fourth quarter, while average down payments declined year over year, signaling continued financial strain. Long loan terms and elevated interest rates remain common tools to manage affordability. Looking ahead to 2026, analysts see potential relief emerging for the used segment. Lower interest rates could reduce monthly payments, and about 400,000 off-lease vehicles are expected to return to the market, increasing supply and offering more affordable alternatives. While uncertainty around tariffs and consumer confidence persists, improved inventory conditions may help ease pressure in the used car market relative to new vehicles.
• Major US and global automakers - including General Motors, Ford, Toyota, Volkswagen, Hyundai, and Stellantis - warned lawmakers that expanding Chinese auto and battery producers pose a “clear and present threat” to the US auto industry, urging restrictions on Chinese plants and maintaining bans on certain technology imports. Tariffs on Chinese vehicles and components have added supply-chain pressures, raising costs for manufacturers and suppliers, which can ripple down to dealers. For auto dealers, intensifying competition and political tensions may affect inventory and pricing: Chinese EVs and vehicles could enter US markets at lower costs, increasing competitive pressure and potentially shifting customer demand. Dealers may face challenges in sourcing popular domestic models if automakers push suppliers to relocate production and reshuffle supply chains. Overall, policy, tariffs, and competitive pressures are likely to influence vehicle availability, pricing strategies, and dealer operations.