The U.S. auto market is increasingly a tale of two buyers. The new CarGurus Market Intelligence report for Q3 reveals a widening divide where budget-conscious shoppers are flocking to older, higher-mileage used vehicles, while affluent consumers are ignoring higher prices continuing to drive demand in the new luxury segment. There have been persistent affordability challenges all year and they continue to shape consumer behavior, even as overall vehicle demand remains surprisingly resilient.
The data shows that while real median household income has barely budged since 2019, the real median price for new and used vehicles has jumped significantly. New vehicle price is up 3.7 percent compared to 2019, while used vehicle price has surged by 10.2 percent. Due to this, shoppers are adapting, creating split pockets of growth at opposite ends of the price spectrum.
“On the whole, new and used vehicle demand has remained strong, as sales growth data shows how shoppers are pivoting in response to an evolving market,” said Kevin Roberts, Director of Economic and Market Intelligence at CarGurus. “Year-over-year sales trends uncover an interesting dynamic between two segments in particular: value-focused buyers targeting older, budget-friendly used cars and higher-income shoppers driving growth in new luxury models. Altogether, the balance between value-driven and premium segments will be critical to watch in the months ahead.”
The Search for Value: Older Used Cars Fuel Growth
New vehicle affordability is no joke, especially as tariffs threaten to drive prices up even higher. Consumers are demonstrating a clear preference for value, and they are finding it in older, higher-mileage used cars. In 2025, the sub-$30,000 price bracket has been the primary engine of growth in the used vehicle market, accounting for nearly 72 percent of the year-over-year increase in sales.
Digging deeper into the data reveals that this growth is heavily concentrated in vehicles that are seven years or older. As of September 2025, these older models made up 45 percent of all sub-$30,000 listings. With an average list price of just $13,600, an average model year of 2014, and an average of 114,000 miles on the odometer, these vehicles represent a compelling trade-off for buyers willing to exchange age and mileage for a lower price point and manageable monthly payment.
The trend is even more pronounced in the sub-$10,000 segment. Growth here is being fueled by dependable, decade-old models. The top contributors to sales growth in this bracket include the Ford Escape (average model year 2014, average price $7,441), the Jeep Cherokee (2015, $8,343), and the Nissan Rogue (2014, $7,551). Despite their age and average mileage often exceeding 125,000 miles, these vehicles are selling quickly, with days-to-turn hovering around 40 days.
At the $10,000 to $20,000 range, shoppers find a sweet spot of newer models with lower mileage. Popular models like the Honda CR-V (average model year 2015) and Toyota RAV4 (2015) are leading the charge, turning in just 33.7 and 32.1 days, respectively. Dealers who focus on reconditioning and transparently merchandising these value-focused vehicles can see rapid returns.
The availability of affordable inventory also varies significantly by region. The report notes that coastal states tend to have the highest share of used inventory under $20,000. In September, California, Florida, and Virginia were among the top states, with sub-$20,000 listings making up over 38 percent of their total used inventory.
The High End: Luxury Buyers Absorb Rising Prices
While one part of the market hunts for bargains, another is fueling a boom at the premium end. New luxury vehicle sales have seen robust growth, driven by affluent buyers who appear undeterred by rising prices. Nearly half of the year-over-year growth in new luxury sales occurred in the $70,000 to $90,000 price range, with another significant surge in vehicles priced over $120,000.
Automakers are, in turn, responding to this demand. While listings in the $70,000-$80,000 range were relatively flat, inventory in the $80,000-$90,000 bracket grew by 23 percent year-over-year, and the $120,000+ segment saw a staggering 57 percent increase in listings. European brands are dominating the upper tiers of this growth, with models like the BMW X5 and Mercedes-Benz GLE showing strong performance. However, Lexus models are turning the fastest in this price range. The Lexus GX, for example, is selling in under 19 days.
A key factor in the luxury space will be the continued impact of tariffs and the transition to new model years. As of September, over 40 percent of new luxury listings were already 2026 models, with an average list price approximately six percent higher than their 2025 counterparts. So far, consumers have willingly paid this premium, but any additional costs passed on from tariffs on imported vehicles and parts could test the limits of this demand.
The Electrified Market: A Hybrid Surge as EVs Hit Their Peak
The electric vehicle market experienced a significant, though likely temporary, surge in Q3. With federal tax credits set to expire at the end of September, new EV sales jumped 53 percent quarter-over-quarter. Used EVs eligible for the credit also saw a boost, though a more modest one at 16 percent.
New hybrid sales have increased by more than 50 percent year-over-year, contributing significantly to overall market growth. The sweet spot for this demand is in the $30,000 to $40,000 price range, where hybrids offer a compelling combination of fuel efficiency and predictable ownership costs without the range anxiety or charging infrastructure concerns associated with pure EVs.
In the used market, internal combustion engine (ICE) vehicles remain the backbone of growth, accounting for nearly three-quarters of the increase in sales. Electrified powertrains are still gaining traction in used sales, but in the more affordable segments.
Related Stories: