Cheaper cars are selling considerably faster than at the beginning of the year

Cheaper new cars are selling faster from dealer lots this year, according to data from Edmunds. From the first quarter to the third, the number of days it took a dealer to sell a vehicle priced between $20,000 and $29,999 dropped 20%. That was the biggest acceleration of any price segment.

Vehicles priced from $30,000 to $39,999 sold about 18% faster. The $40,000 to $49,999 tier saw days-to-sell drop nearly 12%. Every segment priced below $50,000 took fewer than 60 days to sell. Every segment above $50,000 took more than 60 days.

"If you're a dealer and you have inventory and that price point, you're definitely noticing," said Ivan Drury, Edmunds' Director of Insights.

Affordable cars remain hard to find. Cox Automotive reported that the average new-vehicle listing price in September was $49,726. Overall sales for some key segments under $40,000 have fallen. Cox Automotive data shows compact car sales down roughly 4% and compact SUV sales down nearly 8% since the beginning of 2026.

Cox Automotive Deputy Chief Economist Mark Strand said there may be supply issues at the lower end of the market. He said the market needs to be read cautiously until fourth-quarter data is available. Strand said Toyota's RAV4, the most popular SUV in the U.S., has been in short supply at many dealerships this year as the automaker shifts production to its Kentucky factory. Ford has discontinued the Escape to make way for its upcoming midsize EV pickup, according to the report.

Sam Fiorani, Vice President of Global Forecasting at AutoForecast Solutions, said compact cars face structural inventory problems. "We've seen the disappearance of affordable, compact new vehicles over the last decade," he said. He said there is currently no compact passenger sedan sold by an American manufacturer. Most compact sedans on the market are Japanese or Korean, with a few German models such as the Volkswagen Jetta and Golf.

Fiorani said compact vehicle buyers are very price-sensitive. "When the price of gas goes up, that eats into their car payment," he said.

According to Cox Automotive, wholesale used prices for compact cars have risen more than nearly any other segment. Auto finance data shows that roughly one in four buyers financing a purchase are taking 84-month loans, a record. Nearly three in 10 trade-ins in the third quarter carried negative equity, meaning they were worth less than their loan balances. Cox Automotive also reported that incentives averaged about 6.6% of the average transaction price as of October.

Edmunds' Drury said trade-in data suggests many buyers of the fast-selling cheaper vehicles are first-time buyers or are buying supplemental vehicles. The subcompact SUV segment has seen sales rise in 2026, which Fiorani said attracts many first-time buyers. He said that segment remains a small share of the overall market.