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Welcome to the Market Pulse—your cheatsheet to auto retail, built to help dealers price right, stock smart, and stay ahead.
May's new-vehicle sales were positive for the first time in 2026, but fleet did much of the heavy lifting: SAAR landed at 16.2 million, with hybrid lineups separating the winners from the losers at the OEM level.
OEM incentive spend landed at $3.3K per vehicle on average: Hybrids are the tightest segment on dealer lots nationally, while brands with heavy inventory are competing on price.
Wholesale used values pulled back from spring highs but stabilized in May: If you're holding inventory bought at peak prices, you're selling into a market that's come off its best levels of the year.
(Source: CarPros / Black Book / Cox Automotive / JD Power)
May's new-vehicle sales turned positive for the first time in 2026, but results varied depending on which brand you're running.
Industrywide, SAAR landed at 16.2 million and total sales rose about 0.6% to roughly 1.48 million units in May, the first positive month of the year.
Still, a meaningful share of that lift came from fleet rather than retail consumers, and the brands driving the retail gains had one thing in common: strong hybrid lineups.
By the numbers: Honda, Hyundai, Kia, and Mazda all posted gains, driven primarily by hybrid demand rather than broad market strength.
Toyota's electrified mix hit 57% of sales, though overall volume was pressured by the RAV4 model changeover.
Honda set an all-time CR-V hybrid record, with overall sales up nearly 10%. Hybrids accounted for 42,583 of those units.
Hyundai was up 3%, with hybrid sales up 90% year-over-year as four HEV models hit May records.
Kia was up 11%, with hybrid sales spiking 179% and EVs up 133%.
And Mazda had its best month since July 2025, up 35%, led by the CX-50 Hybrid and a strong Mazda3 month.
On the flip side: Ford’s sales fell 14%, with the F-Series down 13% and the Lincoln down 20.5%.
NOTE TO DEALERS:
There's obviously nuance to each OEM's report. In Ford's case, the decline is partly a supply disruption.
But the broader point holds:
Hybrids were drawing in a good share of customers even before gas prices spiked.
Not too surprising that that strength has held, and that the OEMs posting gains are the ones with hybrid products that buyers are actively asking for.
Incentive spending is up more than 20% industrywide, and the wholesale used market has come off its spring highs.
OEM incentive spend is averaging roughly $3,300 per vehicle industrywide, up more than 20% year over year.
For EVs: That number tops $10,000 per vehicle as manufacturers try to fill the hole left by the expiration of the federal tax credit.
Leasing is recovering too, now at 22%+ of transactions, but mostly because it's one of the few tools left to put a manageable payment on a $46,000 vehicle.
Inventory-wise: There are roughly 2.9 million new vehicles on dealer lots right now.
Toyota, Honda, Kia, Chevrolet, Lexus, and Audi are running tight, which means dealers on those franchises don't need to discount heavily to move units.
Ram, Jeep, Dodge, Chrysler, and Mitsubishi have considerably more on the ground, and that's where buyer leverage and aggressive pricing are concentrated right now.
And on the used side: Wholesale values surged through Q1, with the Manheim index hitting its highest point since summer 2023 in March, before pulling back 1.6% in April.
May somewhat stabilized, with values still running about 3.6% above this time last year.
WHY IT MATTERS:
If you're operating a high-inventory franchise, you're discounting to move units.
And if you bought used inventory at peak wholesale prices earlier this year, you're retailing into a market that's come off its spring highs, even if values are still elevated against last year.
A quick word from our partner
When buyers are ready, financing can’t be the holdup.
Ben Atkinson, VP of Auto Lending at Upstart, joined Evan Driscoll, GSM at Audi Jacksonville, on Car Dealership Guy’s Industry Spotlight to discuss how AI-powered financing helps dealers keep momentum after hours, reduce duplicate credit app entry and move used inventory faster.
The takeaway: AI isn’t replacing F&I teams. It’s helping them say “yes” faster.
We covered a lot above. Hybrid demand is real. So are the persistent affordability woes.
So it's only right that we offer up a few tactics on how dealers are navigating both.
Here are some dos and don'ts worth considering right now:
Do: Manufacture your own used inventory through a 90-day loaner cycle.
Brian Benstock, Vice President & General Manager at Paragon Honda and Paragon Acura, is doubling down on used cars at his White Plains store, not by buying more at auction, but by running his own supply.
"We take our new car inventory, put it into loaner car rental cars... for about 90 days. At the end of that time, you take the money that you got from income from the rental cars, use that to depreciate that loaner car and put it into your CPO at a number that cuts everybody else's, the competition's legs out from under them."
Brian Benstock
That’s four bites of the apple (new car margin, rental income, recon throughput, and CPO gross) on a single VIN in 90 days.
Do: Use your F&I office to build trust, not just close gross.
Vic Keller, Founder and CEO at Experience Ventures, has founded multiple companies acquired by Berkshire Hathaway and spent years studying what separates durable dealerships from transactional ones.
His read on F&I in the current environment:
"The absolute number one department to build trust in the front end of a franchise car dealership is your F&I department... you need to hire people that can create the highest level of trust because that trust is going to be conveyed as professionalism and that trust is going to make its way out into the community."
Vic Keller
What this looks like: "It needs to be someone that can create trust, that can be authentic, that can be endearing, that can be compassionate, that can be understanding of people's situations."
Don’t: Let a used car sit on the lot when it could be working as a lease.
Lease penetration is back above 22% on new vehicles. Benstock thinks the same logic applies to used.
"How about leasing these used cars... most of the cars, the Toyotas, the Hondas have great residuals, so slap a lease on that and make it affordable for your customer. It's uber affordable when you're leasing a used car."
The math behind it: "In a 10-year period of time, I can conduct nine transactions between the five trade-ins and the four used cars as opposed to your two transactions."
More bites out of the apple is the goal right now, because new-car front-end gross isn't carrying anyone through the summer.
If that means leasing a used car instead of retailing it, great. If it means running a loaner through recon into CPO, amazing.
Either way, it's about finding more value in what you already have.
The latest updates to the CDG Buy/Sell Tracker.
