BOSTON–There is an “interesting dynamic” to be found in how consumers are responding to a changing automobile sales market, according to a new report.
CarGurus’ new Q3 2025 Quarterly Review reveals how the market is being shaped by ongoing affordability pressures, according to the company.
“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,” Kevin Roberts, director of Economic and Market Intelligence at CarGurus, said in a statement. “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 Findings
Among the findings in the report:
- Used car demand leans toward value: “So far in 2025, most used retail sales growth has been in vehicles priced under $30,000 as buyers trade age and mileage to find value,” CarGurus said. “This segment accounted for roughly 73% of the year-over-year (YoY) increase in used sales, with under $30,000 growth concentrated on vehicles aged seven years or older.”
- The affordability picture varies by region: “Shoppers focused on affordability may need to expand their horizons. According to CarGurus data, coastal states had the most used options under $20,000. California, Florida, Texas, and Virginia had the largest share of used inventory under $20,000, with at least 30% of listings falling in this range in September.”
- Luxury contributing to new sales growth: According to CarGurus, “While value-conscious shoppers seek affordability, luxury buyers helped fuel growth at the top of the market. Nearly half of new luxury growth YoY fell in the $70,000 to $90,000 range, with additional strength for vehicles listed at $120,000 and above. European brands are leading much of the upper-tier growth, but tariff exposure remains a factor to watch. As of September, over 40% of luxury listings were 2026 models, with an average price about 6% above comparable 2025 models. While consumers have accepted premiums so far, any additional tariff-related costs could test demand.”
- Electric vehicle (EVs) see short-term gains: “Ahead of federal tax credit expirations, new EV sales surged 53% quarter-over-quarter, while used EV sales rose 16%,” CarGurus stated. “Although EVs have been in the spotlight recently, hybrids continued on a strong trajectory in 2025. New hybrid sales are up about 50% YoY by both share and contribution to growth, with the strongest demand in the $30,000 to $40,000 range. With fewer EV launches on the horizon and expectations for muted EV demand, hybrids could see even greater momentum.”
The full Q3 2025 Quarterly Review is available here.
