Browse
Log in / Register
Share
Oct. 7, 2026 — CarGurus' Q3 Quarterly Review shows affordability, not preference, is now driving powertrain choice. With regular gas averaging $4.48 a gallon on Sept. 24 — the highest AAA has recorded for that date — and the Federal Reserve raising its benchmark rate on Sept. 16 for the first time since 2023, hybrids are the clear beneficiary: new hybrid sales rose 24% year to date while used hybrid sales climbed nearly 33%.
The Fed's quarter-point increase hasn't fully reached auto loan rates yet, but Treasury yields have already moved up, and financing costs typically follow. For a shopper borrowing $40,000 over five years, even a quarter-point increase adds a few hundred dollars in interest over the life of the loan. On top of that, gasoline is sitting at levels AAA has never recorded for this point in the year. Put the two together, and the total cost of owning a gas-fed vehicle has become a central part of the purchase decision.
CarGurus frames the result as a K-shaped market. Demand runs strongest at the low end, where buyers are chasing the lowest total cost, and at the high end, where premium shoppers are less sensitive to rate moves. In the middle, where affordability pressure is greatest, shoppers are making different powertrain choices than they were a year ago.
The timing of the Fed's move matters. It lands just as households are also absorbing higher pump prices ahead of the winter driving season, and auto loan rates tend to track Treasury yields, which have climbed in recent weeks as markets price in tighter policy. The full pass-through to loan offers may not appear until lenders refresh their rate sheets, but consumers are already adjusting budgets in anticipation.
Through September, new hybrid sales were up 24% year to date, making hybrids the only mainstream powertrain segment with growth in 2026. The used market is even stronger, with hybrid sales up nearly 33%.
Toyota leads the way with 47.2% of new hybrid sales and holds four of the top five spots among the best-selling new hybrids. The top new hybrids remain relatively affordable, with the Ford Maverick averaging $34,200 and the Toyota RAV4 $41,300. But supply is constrained: the RAV4 Hybrid has 15.6 days of inventory, the Grand Highlander Hybrid 16.0 days, the Sienna 17.3 days and the Camry 21.7 days.
Hybrids now outsell their gas-only counterparts for several nameplates, including the Highlander, Grand Highlander and Maverick. That's a notable reversal, and it shows how quickly shoppers have pivoted from engine preference to total-cost reasoning.
Toyota's lead is not accidental. The brand offers hybrids across multiple body styles and price points, from compact sedans to three-row SUVs, which lets it capture shoppers who might otherwise leave the segment. Four of the top five best-selling new hybrids are Toyota models; the Maverick is the only non-Toyota in the group. That breadth, more than any single model, explains why Toyota holds nearly half of all new hybrid sales.
The supply crunch is showing up in used listings. Used 2026 RAV4 Hybrids are listed at an average of 116% of the new model's manufacturer's suggested retail price — about 16% above sticker. It's uncommon for a used vehicle to price above a new one, but buyers are effectively paying for availability. A used RAV4 Hybrid can be bought today; a new one may take weeks to arrive.
That dynamic gives dealers a clear signal: hybrid inventory is scarce, and pricing it aggressively is defensible. But it also cautions against relying on hybrids alone, since supply is the constraint.
The same lens is hurting new EVs. Excluding direct-to-consumer brands, new EV sales fell 48% year to date, and new EV inventory dropped 34% year over year in September. The average new EV list price has fallen 15%, yet days' supply is still up 82% from the post-tax-credit low. Translation: the problem isn't availability; it's the sticker price and the monthly payment that comes with it.
Variation across models is striking. The Toyota bZ4X sits at 37.6 days of supply, the Hyundai Ioniq 5 at 55.0 days, and the Chevrolet Equinox EV at a heavy 118.2 days. Some EVs are clearly reaching their audience; others are not, and price is the dividing line.
The used EV market is behaving differently. Inventory rose 60% year over year in September as off-lease vehicles returned to lots, yet average prices slipped just 5%. Days' supply is up 36% from the post-tax-credit low, but the segment is absorbing the influx more steadily than the new market.
Demand is most concentrated below $32,000. The Tesla Model 3 averages $24,900 and turns in 30.4 days; the Tesla Model Y averages $32,100 and turns in 28.3 days. Those are healthy figures for a segment that skeptics have written off.
Part of the used EV story is timing. The vehicles now hitting dealer lots were leased or sold new two to three years ago, when EV production was ramping up and incentives were generous. That wave is expected to continue, which means used EV supply should stay ample through next year. For shoppers, that points to sustained negotiating power; for dealers, it means there is room to move volume if prices are set near buyer expectations.
What stands out in this data is how consistently used EV demand clusters below $32,000. That's close to the average transaction price for a non-luxury compact car, which suggests buyers are now measuring EVs against ordinary cars rather than treating them as a separate premium class. For dealers, the playbook is simple: keep used EVs priced near that mark, highlight ownership costs, and watch out for hybrids competing for the same customer.
The review doesn't call a bottom for new EVs. But the used market data implies that EV demand hasn't vanished — it's waiting for price relief. If new EV prices keep falling, some of that demand may pull forward.
For many shoppers, the decision now comes down to a trade-off. A used EV under $32,000 offers lower fuel and maintenance costs, but buyers must contend with charging access and battery-health uncertainty. A hybrid, whether new or used, delivers fuel savings without the charging question but often carries a higher acquisition cost. The CarGurus data suggests both sides are winning: hybrid sales are rising because efficiency is a safe choice, while used EV inventory is turning faster at lower price points. It's not a market where one powertrain is replacing the other; it's a market where both are growing at the expense of gas-only vehicles in the mid-priced tier.
CarGurus' broader conclusion is that powertrain choice has become a line item in the family budget. Shoppers who want efficiency and reliability are choosing hybrids; bargain-hunters are finding value in used EVs as supply grows. Future Fed moves will matter — another hike would hit monthly payments across the board, while a cut would ease pressure and could reawaken new EV demand.
For dealers, the near-term takeaway is to treat hybrid inventory as scarce and used EVs under $32,000 as a genuine pocket of demand. The wider implication is that automakers can no longer assume a captive audience for any powertrain. Every sale is now a comparison of fuel costs, insurance premiums, depreciation and financing terms. In that environment, the vehicles with the lowest total cost — and the shortest wait time — are the ones that will win. This affordability cycle isn't over, and powertrain strategy is now inseparable from pricing strategy.
