Used car dealers are suddenly at the center of the electric vehicle story. In 2026, used EV prices are rising even as new EV sales are down 28% and used EV sales are up 20%. High gasoline prices linked to the Iran war and the end of federal tax credits are pushing more buyers toward pre owned electric models, especially at the lower end of the market. That shift affects margins, inventory risk, and pricing power for auto retail stocks. This article looks at three stocks exposed to these trends and how this news could matter for your portfolio decisions.

Lithia Motors (LAD)

Overview: Lithia Motors is a large auto retailer that sells new and used vehicles, arranges financing and insurance, and provides repair and maintenance services across its dealership network and online platforms in the US, UK and Canada.

Market Cap: US$9.40b

Lithia Motors gives you exposure to the used EV upswing and the broader shift toward digital car buying, while also leaning on high margin aftersales and financing operations that support earnings quality. The company reported a Q2 2026 earnings beat, stronger used vehicle margins and record financing income, and it continues to return capital through higher dividends and sizable buybacks. At the same time, debt is significant and cash flow coverage is a concern, and the long term move to lower maintenance EVs could pressure its service profits. If you want to understand how those strengths and risks balance out for long term returns, the detailed Simply Wall St narrative spells it out in full.

Rising used EV margins and record financing income suggest the Lithia Motors story is evolving faster than many investors realise. Get the full picture in the 3 key rewards and 1 important major warning sign

CarMax (KMX)

Overview: CarMax is the largest dedicated used car retailer in the US, offering a wide range of used vehicles, including hybrids and EVs, alongside auctions, extended protection plans, and in house financing through its CarMax Auto Finance arm.

Operations: CarMax generates about US$26.3b from CarMax Sales Operations and US$1.8b from CarMax Auto Finance, with all reported revenue of roughly US$28.2b coming from the United States.

Market Cap: US$8.39b

CarMax sits right at the heart of the used EV story that is unfolding in 2026. Management has been clear that EVs are still a small slice of sales, but CarMax wants to be the largest used EV retailer as supply grows and affordability improves. That vision is now meeting real world tailwinds like higher used EV prices, stronger demand and a business model that blends online and in store buying with in house financing. At the same time, investors have to weigh margin pressure, a high P/E multiple, weaker recent profitability and funding risk tied to external debt. If you want to see how those positives and pressure points stack up for long term returns, the Simply Wall St narrative goes much further than headline earnings.

CarMax’s push to be the go to used EV retailer is running alongside a rich P/E and funding questions that many investors may be underestimating. Get the fuller story in the 1 key reward and 3 important warning signs (1 is major!)

Asbury Automotive Group (ABG)

Overview: Asbury Automotive Group is a large U.S. auto retailer based in Atlanta that sells new and used vehicles and offers repair, maintenance, collision, parts, and a wide range of finance and insurance products across its dealership network.

Operations: Asbury Automotive Group generates about US$17.9b from its Dealerships segment and US$326m from TCA, with minor eliminations, and all reported revenue of roughly US$18.0b comes from the United States.

Market Cap: US$4.62b

Asbury Automotive Group sits in the slipstream of the used EV shift, with management highlighting growing off lease EV supply, high gasoline prices and firm used car demand as support for its push into higher used volumes while aiming to keep healthy per vehicle profit. At the same time, investors are watching its sizeable debt load, modest profit margins and the risk that more EVs could gradually weigh on its high margin service business. In addition, Tekion driven efficiency gains, active share buybacks and a valuation that screens as cheaper than many peers make Asbury a complex but notable way to gain exposure to the Used Car Dealership and Auto Retail Sector screener story, particularly if the used EV tailwind continues.

Asbury Automotive Group’s mix of Tekion driven efficiency gains, active buybacks and a lower screening valuation hints at an underappreciated earnings story. Get the missing context in the analysis report for Asbury Automotive Group

The three stocks in this article are only a starting point, and the full Used Car Dealership and Auto Retail Sector screener highlights 22 more companies with equally compelling used auto retail narratives that you may want on your radar. Use Simply Wall St to identify and analyze the exact catalysts and narratives that matter to you so you can filter for the highest conviction plays in this sector.

Take Control of Your Investment Journey

If Asbury Automotive Group or any of these companies sound like a great opportunity, register for FREE with Simply Wall St and add your companies to a Watchlist to monitor the share price against the fair value the ideal entry point. Once you've made your move, manage your holdings with our Portfolio Command Center that filters out the noise to deliver only the most critical, actionable updates. Throughout your journey, our Community allows you to filter the best ideas from thousands of investor perspectives. By uncovering hidden catalysts and risks early, you'll accelerate your decision-making and stay one step ahead of the market.

Seeking Alternatives Beyond Used Auto Retail

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.