Used vehicle inventory hit its highest point in more than three years in July, according to CarGurus, but demand and prices were still both up around 4% from last year.
In the news: Used inventory was up 5.6% from last year in the CarGurus Intelligence Report released Tuesday.
The increased supply came from vehicles three years and younger outpacing 2025’s inventory of newer models, with 1-year-old units making up more than 15% of the market.
The largest share of inventory is among vehicles $30,000 to $40,000, more than 15%, helping push the average used vehicle price to $30,200, which is $4.1% above July 2025.
Even with the higher prices, used-vehicle demand was 3.7% ahead of last year, with vehicles staying on the lot 68 days, three days less than a year ago.
“Used is benefiting from the affordability side of the equation, even with used prices up,” said Kevin Roberts, Director, Economic and Market Intelligence for CarGurus.
“Coming out of the chip shortage, I had a hope that we were going to see rebounding inventory levels, and Econ 101 makes you think that more supply would help lower prices, but that increased level of demand out there just really kind of worked against lowering prices.”
New vehicle prices rise: New vehicle prices topped out at $51,500 in July, a $400 month-over-month increase and 4% YOY.
The makeup of inventory played a role in the price increase, with the share of vehicles under $30,000 falling to just 10.7%.
Additionally, nearly one in 10 vehicles is more than $80,000.
Those vehicles under $30,000 represent a 56-day supply, while it’s at 90 days for those above $80,000.
“Consumers really like under $30,000 new vehicles; they’re just few and far between at this point,” Robert said.
Toyota leads OEMs in demand: Toyota continues to lead all automakers in demand, according to CarGurus, at nearly the same level as July 2025.
GM was the only other automaker with a more than 15% share of the market.
Toyota was also the only automaker to average less than 50 days on the market.
Ford and Mazda joined Toyota as OEMs whose days on the market decreased year over year.
Roberts credited Toyota’s success to its strategy to develop more hybrid vehicles.
“It really couldn’t have worked out better for them on that front where the growth is really happening in hybrids right now,” Roberts said.
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Hybrid interest remains strong: To illustrate Roberts’ point, hybrids have the lowest days of supply of any new vehicle powertrain, around 40 days.
Though interest is down from when gas prices peaked in May, views of hybrid listings on CarGurus were at 13.9% in July.
Of the 10 top hybrid models with the lowest days of supply on the market, nine are Toyota or Lexus models, led by the Toyota Highlander Hybrid at 13.6 days.
Bottom line: Used demand remains high, though prices are up. And on the new market, there are challenges with prices, but demand is down less than 1% from last year.
“Even with the price increases we’re seeing, sales are still, on an overall basis, holding up pretty strong,” Roberts said.
He added that macroeconomic factors could impact sales in the remaining portion of the year, with uncertainty around interest rates, gas prices, and labor.
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