CarGurus’ February Intelligence Report affirmed a continuing trend: used-vehicle demand is up, and new-vehicle demand is down.

The online auto research and shopping provider's Used Vehicle Demand Index jumped over 5% year-over-year, showing the best February performance in years.

Models that were 0 to 2 years old had the biggest year-over-year demand gain of any age group. CarGurus postulated that budget-conscious shoppers may be opting for lightly used 2024 or 2025 models instead of new 2026 models.

The demand lowered its Used Vehicle Availability Index month-over-month, but used inventory was still up from a year earlier.

The $15,000 to $20,000 used segment rose slightly in market share from 16% to 17%, but market days' supply rose by half a day as supply built faster than the demand could clear it.

However, in the $20,000 to $25,000 segment, the market was essentially flat as the market days' supply dropped a full day, showing demand outpaced dealers’ ability to restock.

Days-on-market data showed that the gap between fast-moving and long-sitting inventory is shrinking. Fast movers are moving ever faster while long sitters are sitting longer, CarGurus said.

On the flip side, new-vehicle sales were down year-over-year for the fifth month in a row, making new retail sales the slowest since 2023. The low demand for 2026 models drove up the market days' supply to levels not seen since 2020 at the onset of the Covid pandemic, according to the report.

Models in the $70,000 to $80,000 price range approached 99 days in February, higher than the overall new-vehicle market days' supply of 87. New-vehicle pricing was relatively flat, up less than 1% year-over-year to $49,316.

The market share of affordable units is still shrinking, with sub-$30,000 vehicles taking up only 13% of new listings. Days-on-market data for new vehicles fell over 7% year-over-year, in part because older inventory is clearing out, CarGurus said. However, vehicles in the 100- t0 149-day range were picking up in market share.

The current market shows stronger demand for hybrids than fully electric models. Though ongoing geopolitical tensions' affect on gas prices could increase in demand for hybrids and EVs, the company pointed out. New hybrid inventory was up to 12% of all new listings, and used hybrid supply also rose, though it comprised only 5% of the used lot.