Is Now the Time to Buy, Sell, or Trade in a Car?

Quick Facts About the Buying and Selling Marketplace

In March 2026, the average new car sold for 3.5% more than a year earlier — an unusual level of price growth.
Used car prices rose slightly in March.
A war in the Middle East is likely to impact prices, but hasn’t done so appreciably yet.

Affordability is an ongoing issue for car shoppers this spring. But the affordability story is complicated.

New car prices remained elevated, and used cars became slightly more expensive. That said, loan approval rates remained strong, and there are still deals to be had outside of the most popular vehicle segments.

We’d love to tell you that stability is on the way. It isn’t.

The progress of the war — and the gas prices it churns up — is hard to predict. On top of that, the chairmanship of the Federal Reserve, which controls key interest rates, turns over in May. The President nominates a successor, and Congress confirms nominations. So debate over rate policy is likely to escalate over the next few months.

This sounds grim, but it’s not as bad as it sounds. A recent survey found car shoppers growing more satisfied with the shopping experience. And while prices spiked late last year, that was partly due to consumer choice. Americans chose a lot of expensive full-size trucks, but it’s still easy to find a much more affordable compact SUV.

A market like this may seem intimidating. But your individual circumstances are likely much simpler to navigate.

We’ll explain what to expect when buying a new or used car, or selling or trading one in, and why it might make sense to act quickly.

What New Car Shoppers Can Expect

New car buyers paid an average of $49,275 in March. While that was relatively flat compared to the month before, the average was 3.5% higher than the year before and significantly above the usual 0.9% year-over-year increase.

Much of that 3.5% can be explained by the market’s trend toward higher-end vehicles, including full-size SUVs and pickup trucks. A continued decline in sales volume of less expensive compact and subcompact vehicles also contributed.

Interestingly, buyer interest in larger, more expensive vehicles didn’t waver as gas prices increased due to the war in the Middle East. “Despite higher fuel costs, U.S. consumers stayed focused on larger segments in March,” explains Erin Keating, executive analyst for Kelley Blue Book parent company Cox Automotive. “Buying behavior does not change quickly, and most Americans have ridden the gas-price rollercoaster before. They know where the ride ends.”

Much of that $49,275 average transaction price came from larger vehicle segments. The average full-size pickup truck sold for $65,964, while midsize SUVs averaged $49,853. The good news is that buyers of smaller vehicles paid significantly less.

Compact SUV buyers paid $37,055, while subcompact SUV buyers averaged $30,612 — still higher than the year before but far below the overall average transaction price.

While it’s almost always tempting to spring for the best model available, it’s still possible to save money. Try to choose only as much car as you really need, and be open to brands with more supply on dealers’ lots.

Is Now the Time to Buy, Sell, or Trade in a Car?

Dealers generally aim to keep a 60-day supply of new cars on the lot and up to 15 days on order. The average automaker was well above that in March, at 79 days’ supply, but that’s down significantly from February’s 92-day supply.

That decrease might mean fewer incentives for some brands, but many automakers were well above the average, which could bring more deals and lower prices.

Each Automaker Is Responding Differently

In 2025, big swings in tariff policy complicated decisions for automakers and dealers. Each automaker has responded to tariffs differently. As long as the tariffs remain, those responses will likely shift constantly.

Some, like Hyundai and Mercedes-Benz, pledged not to raise prices at first, though increases are trickling in with the model-year change. Others are deciding on a case-by-case basis.

Automakers have absorbed some of the cost of tariffs for a while. They might even respond by raising the price of one car to help pay for the tariff on another.

With so much constantly shifting, your best tool for understanding local price changes is the Kelley Blue Book Fair Purchase Price, which we calculate using recent transactions for that car in your area. We update each Fair Purchase Price weekly, showing you how tariffs and tariff anxiety are impacting the prices of the specific vehicles you’re shopping for where you live.

Loan Conditions Continue to Improve

Prices are all that cash buyers need to worry about. However, few car shoppers are cash buyers. Most Americans borrow money to buy a new car.

On that front, the news is good. It hasn’t been this easy to qualify for a new car loan in three years.

Most Americans buy cars on credit, and the good news for March is that loan approval rates remained at around 71%, stopping a two-month slide. Buyers made larger down payments as well, up to 13.9% from 13.4% in February.

The Federal Reserve, commonly called “the Fed,” has also played a role. The Fed sets the federal funds rate, the interest rate banks use when they lend each other money. The federal funds rate determines interest rates for all types of loans, including car loans. It’s still on the way down, which should ripple through the economy over the next few months.

The Fed has now cut rates at its last three meetings. Rate cuts typically take a few months to reach shoppers, so the best rates may still come in early 2026.

The Fed, incidentally, is likely to become a fixture of political debate early in 2026. Current Chair Jerome Powell sees his term end in May. The President must replace him with the consent of Congress, and the White House has made clear that it’s looking for a chair who will lean toward rate cuts as often as possible.

Economists and politicians will debate the wisdom of that. Actual loan conditions may be more stable than the news stories will suggest.

The downside is that more borrowers had negative equity, reaching 59.2%, a new all-time high for the third month in a row. Negative equity, also known as being “upside down” on an auto loan, is when borrowers owe more than the vehicle is worth.

What Used Car Shoppers Can Expect

The average used-car listing price was $25,390 in March, up slightly from February. Supply dropped to 37 days, down two days year over year and lower by seven days from February, as sales increased and volume reached its lowest level on record. Used car sales typically accelerate during income tax refund season. Inventory remained constrained in March compared to recent years.

That trend might take some time to reverse, as Americans are holding onto their cars for much longer and automakers have been producing fewer cars for several years. That means fewer available used cars and higher prices for the units sitting on dealers’ lots.

Older, Less Expensive Cars Harder to Find

If you hope to find an older vehicle and your budget is less than $15,000, these cars remain in short supply. Dealers ended March with just 27 days’ worth of used cars priced under $15,000 — 11 days below the overall industry average.

However, the tariff threat could push used car prices higher. When new car prices rise, would-be new car shoppers head to used lots looking for something still in their price range. More would-be new car shoppers start buying up the available used vehicles, drawing down inventory. Plus, Americans are holding onto their cars longer than ever. The average vehicle on American roads is 12.8 years old. Automakers also produced fewer cars for several years after the 2008 recession, leaving fewer higher-mileage, older used vehicles available to sell.

The most accessible used cars carry prices between $15,000 and $30,000.

Automakers Build More Expensive Cars

If you haven’t been car shopping in a while, the cars on offer may surprise you.

In recent years, inexpensive cars have grown scarce. Recent analysis finds that sales of vehicles priced at $25,000 or less have fallen by 78% in just five years. Six years ago, automakers offered 36 new models in that price range. Today? Four.

At the other end of the scale, in 2017, they built 61 models priced at $60,000 or more. This year, they built 114.

Dealers are pushing back, telling automakers they need more mainstream cars to sell, but correcting the problem will take time.

How to Buy a Car Right Now

New car prices remain about $8,000 higher than five years ago, dating back to the COVID-19 pandemic. That’s when the average transaction price for new vehicles was just under $41,000. However, with all the technological advances and offerings, your next car will likely last longer and help you drive safer than ever.

RELATED: Buying Older, Used Cars in 2026

Vehicle quality studies repeatedly show that today’s new cars suffer fewer problems than those from just a few years earlier. Buyers of higher-priced used cars will likely see those vehicles stay on the road even longer. The same goes for those buying new ones.

With most automakers now building such durable cars, they compete by adding more high-tech features. Features like adaptive cruise control and Apple CarPlay are now more common than ever on entry-level vehicles. Read on for our tips on buying a car right now.

How to Leverage Incentives to Buy a New Car

Last month, car incentives comprised about 7.2% of the average deal. To learn how to take advantage of incentives, read about our monthly best car deals to find dealer or manufacturer offers, including cash back and lower interest rates for financing your next vehicle.

RELATED: How to Buy a New Car in 10 Steps

Selling a Car Right Now

Few of us can sell a car without needing to buy a replacement. If you can sell now, what are you waiting for? You could get more for your vehicle if it’s in high demand, and that’s excellent news. The best way to get the most money for your used car is to sell it privately. But if you don’t want the hassle, there is still an opportunity to sell to a dealership.

PRO TIP: If you’re selling a car, consider selling it peer-to-peer using Kelley Blue Book’s Private Seller Exchange marketplace. It’s a low-cost method that helps consumers earn more on their vehicles than they would by selling to a dealership.

Trading in a Car Right Now

The ongoing shortage of used cars will be with us for years. As a result, you’ll likely still see respectable offers for your used car this month.

Searching for a decent price for your trade-in is still a good idea. Shop around. Each dealership tries to keep a balance of vehicles on its lot. Sometimes, the one you want to buy from doesn’t need your trade-in desperately, but a competitor does.

Research your vehicle’s Kelley Blue Book value, then call several local dealerships to see what they’ll offer you for it. Or try our Instant Cash Offer tool, which brings you deals from various dealerships without obligation. You can choose your preferred offer or use it to negotiate with others.

Is Trading in Your Vehicle a Good Idea?

Possibly. You could get more money than usual if your vehicle is in high demand. It will help defray the costs of buying a new or used car. However, if your vehicle is not in high demand, you can expect to get close to the Kelley Blue Book value. Use Kelley Blue Book’s car valuation tool to find out the price of your new or used car.

Can You Trade in a Vehicle That’s Not Paid Off?

Yes. Whether you have paid off your car or not, you can still trade it in. However, a car depreciates when you drive it out of the dealership. It’s best to take stock of how much equity you carry in the vehicle. Take the difference between the car’s current market value and what you owe to figure that out. Read our story on selling a car.

Looking Ahead

New car prices crossed the $50,000 line late last year and are likely to do that again this year. Automakers will eventually have to address the yawning gap at the low-cost end of the car market. But they’re being conservative with their business decisions now, with few willing to take the risk of designing cheaper cars when the expensive ones are selling so well.

Used car prices, barring any unusual disruptions to the market, should increase only slightly.

If you need a new car soon, it might make sense to act now while prices remain steady.

RELATED: 10 Best Used Car Deals

Tips for Buying a Vehicle Right Now

If you shop right now, we recommend a few strategies to help you find the right new or used car that fits your budget.

Expand your search. Widen your search to a broader geographic area because you could find a better deal or the used car you want outside your immediate area.
Stay patient. Call dealerships to see what’s in stock for those high-demand vehicles. Leave a refundable deposit if you want first dibs.
Buy a less expensive model. With higher car loan interest rates, consider buying a cheaper vehicle model instead of a more expensive one in the lineup you’re considering. Understand how much you can afford.
Look for deals. Make sure to research car deals to find what works best for you. It may involve contacting or visiting several dealerships as you search for the right fit.
Weigh your options. Don’t just look for a car; search for the best interest rates from banks or credit unions. Also, shop for insurance rates before the deal to know how much higher auto insurance will cost for your desired vehicle. Then, weigh all your options, including financing incentives and deals at the dealership, if that’s where you buy your next vehicle. Also, you may find that the prices of some newer-model used vehicles are almost the same as new cars. Just keep all your options open during your search.
Avoid dealer markups. If you see a markup (sometimes called a “market adjustment”) on your final invoice, ask the dealer to remove it. If they refuse, shop at another dealership. Markups were more prevalent during the COVID-19 pandemic. However, dealers still mark up some vehicles that are in short supply.
Question all add-ons. If your sales summary includes entries like “window tint,” “fabric protection,” “carpeted floor mats,” and other add-ons you didn’t request, ask the dealer to remove those line items from your invoice. Many dealers tack on these extras to make quick profits.

It may make more sense to keep your existing car for another year or two. If you must buy, be prepared to take excellent care of your next car to keep it running for a long time.

Editor’s Note: We have updated this article since its initial publication. Chris Teague contributed to the report.

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