Since the pandemic, each year has begun with expectations of market normalization, yet unanticipated events continue to disrupt this trajectory. In 2025, tariffs drove demand in the first half of the year. In 2026, the federal EV policy announcement initially supported new EV demand, while more recently, escalating geopolitical tensions in the Middle East have driven up gas prices, further reinforcing interest in EVs, both new and used. Together, these factors have introduced new dynamics into the automotive market.

The first quarter of the year presented a divergence to market performance. The used car market outperformed expectations, delivering modest year-over-year growth despite a strong comparison base in Q1 2025, supported by our internal transactional data. In contrast, the new car market softened, broadly aligning with expectations, with overall sales volumes declining during the quarter compared to the same period last year.

Price dynamics remained relatively stable. Used car prices, which were elevated by approximately $830 due to tariff-driven demand in 2025, took roughly 11 months to normalize. As of the end of March, prices are slightly down year-over-year (-0.3%) at $36,713 and are at their lowest March levels since 2022.

New car prices dipped by 2.7% year-over-year to $62,830. While down versus last year, they remain elevated relative to pre-pandemic levels. Pricing trends continue to vary by OEM, largely driven by differences in inventory and demand conditions.