Used Car Dealers NAICS 441120

Jun 16, 2026 - Three-Year-Old Used Vehicle Prices Near Record Highs

• Edmunds’ Q1 2026 Used Car Report found that prices for three-year-old used vehicles remain near record highs, averaging $31,548 (the second-highest first-quarter level on record) despite a continued decline in residual values. Three-year-old vehicles retained 66% of their original MSRP on average, the lowest first-quarter retention rate in five years and a sign that depreciation is returning toward more normal levels after the pandemic-driven pricing surge. However, affordability remains a challenge because new-vehicle prices have risen so much that even with faster depreciation, used vehicles are still expensive. Edmunds attributes the resilience in used-car prices to limited off-lease supply, which continues to constrain inventory. As a result, while the used market is gradually normalizing and used vehicles are becoming a better value relative to new cars, buyers should not expect a significant drop in prices anytime soon.
• Rising inflation, tariffs, and the ongoing Middle East war are expected to further weaken US auto demand in 2026, pressuring vehicle and parts imports while boosting demand for aftermarket repair components, according to S&P Global. Containerized US imports of automobiles and auto parts fell 9.4% in 2025 as higher borrowing costs, steel tariffs and elevated vehicle prices weighed on consumers, with prolonged conflict expected to push prices even higher and suppress container volumes further. At the same time, aftermarket suppliers such as Advance Auto Parts are benefiting as consumers delay new vehicle purchases and keep older cars on the road longer. Auto parts importers are also accelerating sourcing diversification away from China toward Southeast Asia, South Korea and Japan, though industry experts warn supply chain shifts could take up to two years amid continued tariff uncertainty and volatile trade policies.

• 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.