The new car market experienced some under-the-surface shifts in August while the used market continued its year-long trend of overperformance.

‍

New - Where have all the next-gen models gone?

The new market continued to see softness in retail demand. Sales declined nearly 4% year-over-year (yoy) after the increases we saw in May and June faded into the rearview mirror. Despite this slowdown, total new inventory declined in August, bringing it to the lowest level so far this year and nearly on par with last year. Consumer interest in affordable vehicles continues to draw down the availability of models priced below $40k. This is likely a culprit behind the rise in average list price to $51.7k and why market days supply (MDS) for vehicles priced under $30k stands near 52 days while it's 91 days for vehicles over $80k.

While new inventory is about equal to 2025 levels, there’s an interesting trend underneath the surface: we're seeing a divergence in next-gen model year vehicles arriving on lot, particularly compared to recent years. At the end of August only 12.4% of inventory was a 2027 model year; compare that to 2023-2025, when next-gen model year vehicles accounted for between 22.1% and 25.2% of inventory. 

What's behind this shift?

• Several high-volume 2027 models are scheduled to launch later in the year, including the next-generation Chevrolet Silverado and GMC Sierra.
• Some automakers are extending the 2026 model year. Nissan, for example, is selling a 2026.5 Rogue.
• The comparison may also reflect the timing of last year's launches. Some 2026 models reached dealers earlier in the calendar year, e.g., the 2026 RAV4 didn't begin to arrive on lots until December 2025.
• Additionally, with the total inventory flat and a higher percentage of current-model-year vehicles, OEMs might be looking to better match 2027 arrivals with 2026 departures to not swell overall inventory levels.
  
  

Pick-ups top the list of models carrying the highest 2026 inventory levels, with days on market ranging from 60 up to nearly 112.

‍

Used - Consistency continues

The used market had another month of consistent trends in August, with used demand up 2.3% yoy, continuing a steady level of growth over the past several months. The market did see inventory levels dip slightly; however, they remain well above last year. Two- and three-year-old vehicle levels are improving, a potential sign that the increase in off-lease vehicles might be working its way into the market already. Time-on-lot metrics were similarly steady while average prices remained stuck at $30.2k for the fourth straight month. Used prices normally start to seasonally cool in the last third of the year and we'll be watching closely to see if this year follows suit or the increased level of used retail demand keeps things elevated.