08/18/2026
Happy Hump Day of Q3 2026!
As dealers move through Q3 2026 and prepare for Q4, I would concentrate less on chasing unit volume and more on inventory quality, affordability, fixed absorption, used-car discipline, and protecting cash flow.
The market is still selling vehicles, but the consumer is clearly moving toward value. In June, new-vehicle SAAR reached 16.5 million, yet buyers increasingly shifted toward lower-priced segments. Subcompact SUV sales rose more than 23% year over year, while the largest concentration of available inventory is now in the $30,000–$40,000 range.
Here are the areas I think dealers should have on their dashboard:
1. Inventory aging—not just total days’ supply.
2. Affordability may be the biggest issue heading into Q4.
3. Watch negative equity and structure deals carefully.
4. Used vehicles and CPO become even more important.
5. Fixed operations should be treated as the financial anchor of the dealership.
6. Protect gross—but don’t protect it at the expense of turn.
7. EV inventory needs its own strategy. EVs should not simply be managed as another model line.
8. Start building the 2027 expense structure now. Don’t wait until December to budget. I would begin a departmental review of advertising ROI, headcount/productivity, floorplan expense, vendor contracts, insurance, technology subscriptions, compensation plans and management structure. Q4 should enter with a 2027 operating model already defined.
The number I would emphasize most if I were sitting in a dealer’s operating meeting today, I would keep coming back to:
Profit per retail transaction × inventory turn + fixed-operations contribution — not simply units sold.
The market doesn’t look like it is collapsing. New-vehicle inventory remains relatively balanced nationally and consumer spending has held up despite economic pressure. But I think the dealerships that outperform during Q4 will be the ones that become more operationally disciplined before conditions force them to.
For an owner or dealer principal, I would reduce this to five Q4 priorities:
Cash. Inventory. Affordability. Fixed absorption. People; not necessarily in that order.
And there is another issue I would add for longtime dealers: 2027 capital requirements and succession/M&A decisions. A dealer considering whether to reinvest, acquire, hold or sell should probably be doing that analysis now, while putting together the 2027 plan—not after the year closes.
For dealers evaluating what comes next—whether that means continued ownership, succession, a strategic merger, or a sale—I am available for confidential discussions regarding all of the above!
It is no secret that planning ahead is key to setting up great days…Make it a great day!
