The Split Market of Summer 2026: Where Prices Are Cooling and Where They're Still Biting
New-car prices finally caught their breath, but used prices kept climbing this spring. Here's where the leverage is hiding in late June—and where it isn't.
I spent 25 years on the inside of dealerships, and one thing I learned is that 'the car market' is never one thing. Right now it's two very different markets wearing the same coat. New-car prices have stopped sprinting, while used prices spent the spring quietly creeping up on you. If you walk in this month treating both the same way, you'll leave leverage on the table—or worse, pay a premium where you didn't have to. Here's what the latest numbers actually mean for the deal in front of you, in plain English.
New Cars: The Sticker Stopped Sprinting (But It's Still High)
Here's the good news on the new side. <cite index="13-45,13-46">New car prices have stabilized somewhat after hitting an all-time high at the end of 2025, and as of May the average transaction price for a new vehicle stood at $49,220—a modest 1.2% increase compared to the same time last year and the smallest annual gain of 2026.</cite> <cite index="19-12">That $49,220 also represented a 0.5% decrease from April.</cite> Translation: automakers aren't piling on price the way they were, and dealers aren't generally getting away with charging over MSRP anymore.
But don't let the average fool you into feeling broke. <cite index="8-13,8-14,8-15,8-16">Those high price headlines can make shoppers feel a little fatalistic, but they're slightly misleading—the average is high largely because Americans are choosing to pay more, with luxury cars and loaded trim levels pushing it up, and savvy shoppers can still find a quality car for much less.</cite> The dealer's job is to sell you the truck with the leather and the tow package. Your job is to buy only as much car as you actually need.
Where you shop matters more than ever, because supply is wildly uneven by brand. <cite index="19-17,19-18">If you're looking at any SUV segment or full-size pickups, you'll find less inventory and stiffer pricing—other segments may have more incentive options to explore.</cite> An overstocked lot is your friend. A brand that's selling everything it can build has no reason to deal. Ask yourself: am I chasing the one model everyone wants this month, or am I open to the comparable car sitting three deep on a competitor's lot?
Used Cars: Still Climbing Against the Calendar
Now the side that's biting. Used prices didn't get the memo about cooling off. <cite index="18-4">Used car prices rose slightly in May, but inventory is rising too.</cite> What makes that notable is the timing. <cite index="3-20,3-21">Non-adjusted wholesale vehicle prices decreased only 0.8% in the first half of June from May—but the long-term average monthly move is typically a decrease of about 0.5% for the full month of June.</cite> In other words, prices are doing their seasonal dip, but from elevated levels, so the relief on the lot is thinner than the calendar would normally promise.
The squeeze is worst at the bottom of the market, which is exactly where most budget-conscious buyers are looking. <cite index="13-3">Vehicles priced under $15,000 are selling especially fast—dealers had only about a 33-day supply of those vehicles in May, compared to 45 days for the overall used car market.</cite> Why? <cite index="13-7">Many consumers who can't qualify for a high-balance new car loan, or afford high monthly payments, have turned to used vehicles, further reducing supply.</cite> If you're shopping cheap, expect competition and be ready to move fast on a clean car—but never so fast that you skip an independent inspection.
There's a real bright spot, though, and it's worth circling on your shopping list. <cite index="13-9,13-10,13-11,13-12">There could be relief ahead for used shoppers: when drivers return leased vehicles, those cars often end up on used lots, and that pipeline is expected to grow by nearly half a million units in 2026 compared to 2025, which could help stabilize prices and provide more options—although many of them will be electric.</cite> That last part is the key. The wave isn't evenly spread; it's concentrated in late-model lease returns, and a big chunk is EVs.
The EV and Off-Lease Window Most Buyers Will Miss
If you've ever been EV-curious, this is the part to read twice. <cite index="5-23,5-24">Vehicles that were leased heavily in 2023 are now flooding the market and facing rapid depreciation, driving considerable discounts for used-car buyers—current market values have fallen so far below original lease buyout prices that drivers can save thousands by turning them in and buying a similar used model at today's lower market prices.</cite> A two-to-three-year-old EV coming off lease is one of the few corners of the used market where supply is genuinely loosening.
Just know what you're walking into on price. <cite index="5-4,5-5">Three-year-old used vehicles climbed to near-record prices in Q1 2026, averaging $31,548, and the only reason used prices didn't top all-time highs is that 3-year-old vehicles retained just 66% of their original MSRP on average—a five-year low.</cite> That falling-residual trend is the buyer's friend: it means the depreciation is doing your negotiating for you on lease returns, especially EVs. Look at the gap between what the car cost new and what it's listed for now, and use it as leverage.
One caution on EV math: a low price doesn't always mean a good deal if the battery health is unknown. Treat used-EV shopping like used-anything shopping—get the history report, get a qualified inspection, and have someone who knows EVs check the battery state of health before you fall in love with the number on the windshield.
What This Means at the Desk This Month
Put it together and your June playbook looks like this. On a new car, your leverage is in choosing an overstocked brand or segment and in stacking the right incentives—and there are real ones out there. <cite index="22-12,22-13,22-14">Low-APR financing deals usually cannot be combined with customer cash, and in most cases customer cash makes the better deal because you're financing a smaller loan amount—but tools like Edmunds' Low APR vs. Cash Back Calculator can help you spot the better value.</cite> Don't let a salesperson pick that fork for you; run both ways yourself.
Watch the strings attached to 'free money.' <cite index="22-11">The best deals are sometimes only available when you finance through the automaker's so-called captive lender.</cite> That can be fine—or it can be the setup for a marked-up interest rate. If an incentive requires captive financing, get the rate in writing and compare it to your own pre-approval from a bank or credit union before you sign anything.
On a used car, your leverage is timing and patience everywhere except the under-$15K tier, where you simply have to be ready to pounce on a good one. And whatever you're buying, judge the whole deal by the out-the-door number—not the monthly payment, not the 'great price' on the window. A confusing market is exactly the environment where padded fees and surprise add-ons hide best.
If you've got a specific car and a specific quote in front of you and you want a second set of eyes before you sign, that's exactly what the 30-Minute Deal Audit is for—$85, by phone or Zoom, your choice, and we go line by line through the OTD price, fees, rate, trade, and any add-ons. No pressure, no upsell, just your real numbers checked by someone who used to sit on the other side of that desk. And if you'd rather skip the dealership dance entirely, the free guides at /free-guides are always there to get you started.