Affordability concerns defined automotive purchasing in 2025, with consumers shifting heavily toward hybrid powertrains and older used vehicles to escape rising ownership costs, according to CarGurus’ year-end market report released December 11.
The automotive shopping platform’s 2025 data shows new hybrid retail sales grew 33% compared to 2024, while hybrid inventory increased nearly 18%. Meanwhile, the total cost of owning a used vehicle stood 39% higher than 2019 levels, forcing budget-conscious buyers toward older models and smaller body styles.
For collision repair shops, these trends signal significant changes in the vehicles entering bays — both in powertrain mix and age distribution.
Hybrid training becomes non-negotiable
Toyota dominated hybrid interest in 2025 across new and used segments, with the Land Cruiser, Sequoia, Grand Highlander Hybrid, Sienna, Camry, and Prius leading CarGurus’ most-viewed new hybrid list. Used-hybrid shoppers gravitated toward the Prius, RAV4 Hybrid, Camry Hybrid, Sienna, and Lexus RX Hybrid.
The hybrid surge comes as pure electric vehicle sales softened following the September expiration of the federal EV tax credit. New EV retail sales dropped 66% in the two months after the credit ended compared to the two months before, according to CarGurus.
This creates a training challenge for shops that invested heavily in full-EV capabilities during the 2023-2024 push. The hybrid surge built throughout 2024 — American Honda set an all-time annual record with 308,554 hybrid sales that year — and continued accelerating into 2025, with Honda’s January 2025 sales showing CR-V and Accord achieving a 55% hybrid mix. Shops must ensure technicians maintain high-voltage hybrid system certifications alongside their EV preparations.
The 3- to 4-year sweet spot returns
CarGurus’ 2025 data offers encouraging news for shops focused on the traditional collision repair sweet spot: the supply of 3- to 4-year-old used vehicles is finally recovering after years of chip shortage-induced scarcity.
As of November 2025, these late-model vehicles remain 9% below pre-COVID inventory levels, but CarGurus projects continued improvement in 2026 as the market moves further from the 2021-2022 semiconductor crisis. The aging trend accelerated through 2024, with vehicles over seven years old growing from 27.1% of used stock in 2022 to 42.7% by the end of 2024 — setting the stage for the 2025 inventory challenges shops are now experiencing.
This age distribution matters for collision shops. Vehicles aged seven years or older account for over 70% of total loss valuations in 2025, according to CCC Intelligent Solutions’ Q1 2025 Crash Course Report. The average vehicle on U.S. roads is now 12.7 years old and is projected to reach 13 years by 2026.
The gradual return of 3- to 4-year-old inventory could help shops capture more repairable claims rather than total losses. However, these 2021-2023 model year vehicles carry more complex technology: CCC data shows vehicles equipped with ADAS demand more frequent and complex diagnostics, while EVs require nearly four more labor hours per repair than internal combustion vehicles.
Ownership costs squeeze repair decisions
CarGurus’ analysis shows ownership cost pressures extending well beyond purchase price in 2025. The total cost of owning a new vehicle stands 30% higher than 2019 levels, while used vehicle ownership costs sit 39% above those in 2019, driven by higher insurance premiums, loan payments, and maintenance expenses.
These pressures are affecting collision repair volumes. Higher deductibles and concern about rate increases are driving more consumers to pay out of pocket or defer repairs entirely. The share of repairable appraisals for damages of $2,000 or less dropped from 41.5% in 2019 to just 25.5% through June 2025, according to CCC data.
The CarGurus report shows average list prices for used vehicles remain elevated in 2025, with prices still up to 50% above 2019 levels depending on vehicle age. As of early 2025, the average transaction price for a three-year-old used vehicle reached $30,522 — the first time this figure exceeded $30,000 since Q2 2023.
What $35,000 buys now
CarGurus illustrated the market shift by comparing what $35,000 purchased in 2019 versus in 2025:
- - In 2019: New Toyota Camry XSE V6, new Jeep Grand Cherokee Limited, new Ford F-150 XLT SuperCrew, or new Honda CR-V Touring
- - In 2025: 2-year-old Toyota Camry TRD with 32,000 miles, 2-year-old Jeep Grand Cherokee Limited with 24,000 miles, 2-year-old Ford F-150 XLT with 53,000 miles, or 2-year-old Honda CR-V EX-L with 19,000 miles
This age shift means shops will see more late-model used vehicles rather than new purchases, though the vehicles will carry advanced technology requiring calibration and diagnostic capabilities.
Looking ahead to 2026
CarGurus projects used vehicle sales will continue growing in 2026 while new sales stall due to pull-ahead demand from tariff concerns and higher prices on incoming 2026 model year vehicles.
The report identifies four key trends for shops to watch: whether automakers pass tariff costs to consumers (affecting new vehicle pricing and used values); interest rate relief timing (influencing purchase and repair decisions); late-model used inventory recovery; and EV demand patterns without federal tax credit incentives.
Kevin Roberts, director of economic and market intelligence at CarGurus, noted that affordability will remain a defining force in 2026. “Cross-shopping across new, used, gas, EV, and hybrid options will remain heightened, with shoppers looking for the lowest all-in cost,” he said.
For collision shops, this means planning for a mixed fleet of older vehicles alongside complex hybrid and ADAS-equipped models, with training and equipment investments calibrated to actual market volumes rather than manufacturer projections alone.
