The used vehicle market started 2026 with increased demand and inventory.
The used market saw a five-year high for demand for the month of January, according to CarGurus’ newest Intelligence Report.
CarGurus’ Demand Index for January, which measures vehicle departures relative to total dealers, showed a 7.2 percent rise from January 2025 and was up 4 percent from December 2025.
“Used sales demand came out roaring in January, with savvy car buyers taking advantage of a month that typically offers lower prices, higher inventory, and less shopper competition before the market heats up during the tax-season rush,” said Kevin Roberts, Director of Economic and Market Intelligence at CarGurus. “The key question now is whether this early surge signals sustained momentum. If this trend holds, it could set the tone for a competitive start to the spring selling season.”
The increase in demand was reported as inventory saw a sizable increase to start the year. The CarGurus Used Vehicle Availability Index jumped 5.2 percent from the start of 2025. It was only slightly behind December (0.3 percent).
“While used inventory dipped slightly in January compared to December, the broader trend has been a steady rebuild in used supply over the past several years. What we’re seeing isn’t a sudden surge, but a continued normalization of the market after COVID and related effects constrained used supply,” Roberts said. “New vehicle inventory recovered more quickly as production ramped back up after the semiconductor shortage. The used market, however, is still working through the effects of several years of depressed new vehicle sales, which limited the pipeline of late-model trade-ins and lease returns. As those model years cycle back into the market, supply is gradually improving.
“So rather than inventory reaching unusually elevated levels, it’s more accurate to say we’re moving back toward historical norms. We expect that gradual normalization to continue, particularly as late-model availability improves and overall used sales volumes stabilize at healthier levels. At the same time, some of the recent inventory build likely reflects dealers positioning themselves ahead of the spring selling season, stocking up in anticipation of stronger tax-season demand.”
The increase in inventory has not brought prices down. Used vehicle listing prices increased from $27,400 in January 2025 to $27,800 this year.
Roberts expects prices to continue the upward trend and for sales to remain robust.
“Used prices typically start to rise in February as tax refunds reach consumers, and we expect that seasonal upward trend to continue through May,” Roberts said. “Sales should strengthen over the same period, and the lift could be more pronounced this year if larger refunds tied to changes in the One Big Beautiful Bill boost demand. If sales accelerate faster than inventory expands, price gains could exceed last year’s January-to-May increase of nearly 5 percent.”
