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Hey everyone, 2026 is kicking off with a much easier car-buying experience. After hitting a record low of 66% late last year, CDK Global’s Ease of Purchase score rebounded sharply to 85% in January (one of the strongest readings on record).
What changed: Even the thorniest parts of the buying experience (inventory availability and wait times) are showing big gains.
— CDG
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Welcome to The Breakdown, an analysis of auto retail’s top trends, moves, and insights in under 5 minutes.
The car market in early 2026 is still a pressure cooker.
Pricing is weird, inventory is fluctuating in all the wrong places, and dealers are rewriting their workflows on the fly.
So, this week I tapped our online dealer community for a temperature check, and after several phone calls, emails, and DMs with operators, there are three trends signaling a broader realignment…
The used car market is a knife fight where speed and sourcing win.
Conditions are “beyond nuts” in the used car market, one dealer told. Auction prices are brutal, and plenty of stores feel like they’re in a constant “acquisition emergency.”
The reason: Despite used-car supply growing year-over-year, inventory is still tight historically.
Via Cox Automotive
And since new-car prices continue to rise, trade-ins aren’t flowing like they used to. Dealers are “paying the moon for them” just to stay in the game. And that pressure is forcing a complete rethink of how inventory moves from acquisition to frontline retail.
Essentially, the new religion is speed.
One dealer shared a deadly‑simple reconditioning hack: as soon as a customer cleans out their trade, the salesperson “takes 10 pics and parks the car on the service drive. Service writes it up, tech inspects, and recon is 100% complete the same day/next day.”
Meanwhile, others are going all‑in on specialization. One store has a tech whose full time job is to pre‑inspect every car so “full detailed Pics are online within a day or two.”
Beyond auctions and rental fleets, dealers are hunting “street buys” and working Facebook Marketplace to fill the pipe. OEM programs like Toyota’s TRAC are being used as stealth feeders for certified pre-owned (CPO) units that “last less than 30 days on average.”
The signal: Underneath all of it, dealers are getting more ruthless about their economics. They’re watching “Cost to Market” (how deep they are in a unit) and “Market Day Supply” (how long it typically sits) to grade buyers and chase fast‑turning units, even if that means thinner front‑end on some auction cars.
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F&I department chargebacks are creating profitability problems.
With front‑end margins all over the place, F&I profit is increasingly vital, but it’s never been trickier to manage.
Dealers are tuning product mix, presentation, and structures to squeeze out more gross without blowing up customers or future retention. At the desk, many are leaning into a “fully loaded pencil” from the jump.
In practice, “two products at first pencil” are required (historically VSC and GAP), but ancillaries like “wheel and tire/paint and fab” are growing in popularity too as long as they feel baked into the deal, and not bolted on at the end.
Behind the scenes, reinsurance strategies are getting more sophisticated. Dealers are experimenting with “hybrid CFCr” structures (CRC = Controlled Foreign Corporation) that offer “no limit to how much money you can put in a book of business, reduced fees and you have control of how you invest the premium.”
But there are red flags too, like a dealer who walked away from a provider after they “wouldn't disclose where all the money was going” and gave “zero control over the claims process.”
However, the "shadow of chargebacks looms large," as one dealer put it.
A surge of refinancing and affordability pressure are driving more cancellations.
Via Experian
Many stores are fighting to keep chargebacks “no more than 10% of total F&I Gross.” Yet, that line is getting harder to hold.
Two schools of thought:
Individual chargebacks: Some dealers deduct “all chargebacks” from the specific F&I manager who wrote the deal.
Departmental chargebacks (with teeth): Others hit “the entire finance dept for the entire amount of the cancellation.” In some cases, the department is charged “the entire amount… instead of the amt net of the refund from the provider if they didn’t turn in a cancellation within 48 hours of receiving it.
The signal: F&I profitability hinges on sophisticated product structuring, transparent presentations, and preventing any threats to gross.
The ongoing war for dealership talent is constant and expensive.
Ask dealers what’s hardest right now and “people” is still near the top.
The fight to find, train, and keep good staff is a nonstop campaign. And some dealers are losing strong candidates over “background check hurdles” after making offers. Others are just struggling to get qualified bodies in the building.
While we patiently wait for the results of NADA’s 2025 Workforce Study, here’s how thing’s we trending at the start of last year.
Via NADA
State of play: Comp plans are getting sharper in some corners of the business.
One pay structure that’s working in F&I…
“A $3k/month salary plus percentage of reserve (10%) plus sliding scale on products (15–19%) with highest for VSCs at high penetration levels.” It “seems to help with stability in slower months” while still rewarding strong product performance.
For technicians, dealers are using micro‑incentives tied to video inspections: “$2 per [repair order] ro w/ video,” or “an extra $1 per flat rate hour if they have 90% video and picture penetration.”
On the sales side, one store pays trainees “$15/hr and $200 per unit,” then a commission plan with “25% of the gross on the front” that “bumps to 30% retro back to unit 1” once a 12‑unit target is hit.
But culture and training are doing just as much work as pay, these dealers told me.
Daily sales “role playing” on “trade devaluation, phone talk tracks, demos, trade issues” is still table stakes. But some dealers are also rolling out automotive‑specific training platforms like RockED to gamify skills by role.
What did you think about this dealer “temperature check?” Are there trends we didn’t include that your store(s) are watching closely? Hit Reply to email and let us know.
Three opportunities hitting the CDG Job Board right now:
Hoffman Auto Group: CFO (Connecticut)
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