Lithia Motors (LAD) · Q3 2026

S1Our Overall Take

This is a read on Lithia's U.S. vehicle-selling business only, not a rating on the company. Lithia Motors runs 467 locations in the United States, the United Kingdom and Canada (management's own disclosure). Our data follows what happens on its U.S. lots: how many cars sell, at what price, and how long they wait for a buyer. This report covers July through September 2026.

New cars held their ground. New-vehicle sales in our data fell 1.8% from a year ago (4.5% at the stores Lithia owned through both years), while the whole new market fell 3.0%. New cars sold 2.2% below the manufacturer's suggested retail price (MSRP, the "sticker"), against 3.4% below a year ago; franchise dealers overall moved only from 3.4% to 3.2% below. Part of that move reflects dealers putting fees into advertised prices this spring (Section 6).

Used cars are the open question. Our count of Lithia's used sales fell 12.1% (15.2% at the stores Lithia owned through both years), in a used market down 3.5%. Lithia guided to flat to mid-single-digit used growth for the second half. Our used count for Lithia has also run 4 to 5 points away from the company's reported change in each of the last two quarters, once above and once below. We show the decline and treat it as a direction to ask about, not as evidence (our interpretation).

The used lot got heavier. Used stock rose 3.3% to 39,776 cars, after setting aside 1,327 cars that had been listed more than 180 days at the same store, which we treat as service loaners (Section 12), and used Market Days Supply reached 45 days, above our typical range for franchise dealers. Used stock listed more than 90 days at its selling store rose to 9.8% from 6.9%. Some of the rise in days of supply comes from the lower used sales count it is divided by.

Why neutral: new-car volume and pricing lean positive, the used side leans negative but rests on a count we cannot rely on this quarter, and the profit measures that decide the print are not in our data. Management guided financing, service, the United Kingdom and cost savings positively, so a neutral vehicle read is more likely to understate Lithia's total quarter than overstate it (our interpretation).

S2The Quarter in Numbers

Every share move is below the 0.3-point level we treat as meaningful. Vehicle revenue in our data was flat. One caution on the used revenue line: a year ago 7.5% of Lithia's used sales carried no price in our data, against 1.1% now, so the year-ago revenue total is understated. On units times average price, used revenue fell about 7.1% and total vehicle revenue about 2.0% (our interpretation).

S3Inventory and Pricing Risk

New Market Days Supply sits inside the typical range for franchise dealers (46 to 80 days). Used Market Days Supply of 45 sits above its typical range (27 to 40 days), as it did in June (44). Two things temper that reading: active units rose only 3.3%, and the sales count it is divided by is the one we treat with caution. Used inventory figures throughout this report exclude cars listed more than 180 days at the same store, an interim rule for service loaners (Section 12).

The used asking premium (unsold stock's average list price against the quarter's average selling price) is above our 10% watch line but narrower than a year ago (13.0%), and narrower still inside mainstream stock (8.4% against 11.9%). That points to mix, not new markdown pressure. On new cars, Jeep and Ram stock aged sharply: 53.7% of Jeep and 41.3% of Ram new stock had waited more than 90 days at the store selling them. Lithia's Jeep new cars nonetheless sold closer to sticker than a year ago (8.9% below against 10.6%).

S4Electric Vehicles, Geography, and the Two Cases

Electric vehicles. New fully electric (battery-electric) sales fell 58.6% to 3,375, after the federal purchase credit ended on September 30, 2025 and pulled sales into the year-ago quarter. The whole market's new battery-electric sales fell 52.6%. Used battery-electric sales rose 36.4% to 3,433, against 11.5% for the market, led by Tesla.

Geography. California new sales fell 6.9%, while Texas (+4.2%) and Florida (+4.4%) rose. On used, Florida (−27.8%), New Jersey (−31.1%) and Texas (−14.0%) carried most of the decline. These are the same states that showed steep used declines in our data a quarter ago, when Lithia's reported used volume was only slightly down, so we do not read them as regional demand.

The positive case. New cars outran a falling market and sold closer to sticker. Average used selling prices rose 5.7%, almost all of it within brands, as Lithia sold fewer cars under $20,000.

The negative case. The used lot is bigger and older, and if our used sales count is even partly right, Lithia sold fewer used cars into a market that fell less. Our data cannot measure what that means for used profit per car.

01Overall Verdict and Confidence

This is a read on Lithia's U.S. vehicle-selling business only, not a rating on the company. Finance & Insurance income, aftersales, Driveway Finance Corporation, the United Kingdom and Canada, and the gross profit Lithia earns on each car are outside our data.

Why neutral: on the new side, all-store sales fell 1.8% in a new market down 3.0%, and new cars sold closer to sticker than a year ago, by more than franchise dealers overall. On the used side, our count fell 12.1%, the used lot grew 3.3%, and used Market Days Supply reached 45. The used count is the weak link. It disagreed with Lithia's own reported change by 4.0 points in the first quarter and by 5.2 points in the second, in opposite directions, and the ratio of used to new sales in our data fell to 0.857 from 0.958 while management guided used volume flat to up. Under our rules that makes the used decline a question for the call, not evidence for the verdict.

Confidence is Medium, capped by three things: the used count's recent record against the company, a new-vehicle quality check that came in closer to zero than its usual offset, and steep state-level used declines that we could not tie to any store sale (Section 12). Management guided the parts of the business we cannot see (financing, service, the United Kingdom and overhead savings) positively, so if this neutral read is wrong, it is more likely to be too low than too high for the company as a whole.

02Signal Summary Table

03Detailed Sales Numbers

Why it matters: units sold times average price is a direct shadow of the vehicle revenue Lithia will report for its U.S. stores. Lithia bought and sold stores over the past year, so same-store figures lead. The all-store figure is the revenue base.

New vehicles

Same-store new sales fell 4.5%, with the same-store average price up 2.6%. All-store sales fell 1.8% against a North American new market down 3.0%. Month by month, Lithia's new sales were down 1.2% in July (market −7.0%), down 4.9% in August (market −2.4%) and up 1.0% in September (market +0.8%).

The average new price rose $1,202 from a year ago. Higher prices within the same brands added about $1,526, and a cheaper brand mix took away about $324.

Used vehicles

Used sales fell in every month: −10.3% in July, −15.7% in August and −9.9% in September, against a market down 7.5%, 2.8% and up 0.5%. The decline runs across every major brand, from Toyota (−14.0%) and Honda (−15.6%) to Chevrolet (−17.8%).

The used-to-new check. Before publishing a used decline steeper than the new decline, we check the ratio of used to new sales. In our data it fell to 0.857 from 0.958 a year ago and 0.877 last quarter. Management guided used volume flat to up mid-single digits for the second half, with store-based used sales up 3% to 5% and Driveway, Lithia's online store, growing at a high-teens rate (management's own disclosure). A falling ratio against guidance for a rising one is the pattern our rules treat as suspect, so the used decline is reported as directional only.

Driveway's share is rising. In July and August, used sales recorded on driveway.com rose 12.4%, while those recorded on Lithia's other websites fell 22.6%, and driveway.com's share of Lithia's used sales rose from 26.7% to 34.6%.

Where the used decline sits in our data. Lithia's sales in our data come from three kinds of listing: its store websites, Driveway, and a small number of group-level listings. MarketCheck's dealer directory classifies every driveway.com rooftop as a retailer listing, so we read that slice as Driveway (our interpretation).

The whole used decline sits in sales recorded on Lithia's store websites. Driveway's slice grew and now carries 31.8% of Lithia's used vehicles in our data, up from 26.9%. New cars show the same shape: store-website sales fell 11.3% while Driveway's rose 28.3%. The same-store panel shows the same split inside the comparable stores: sales recorded on their own websites fell 14.5% on new and 21.9% on used, while sales recorded under Driveway at the same stores rose 26.6% on new and 2.2% on used. The slices are also unstable from quarter to quarter: in the second quarter, Driveway's used slice was up 125.4% on a year earlier and store websites down 34.6%. A sale that moves between a store's own website and Driveway should not change the total, but a decline this concentrated in one channel, beside a growing one, fits a change in how sales are credited between listings better than a fall in cars sold. It is a further reason the used decline is reported as directional only (our interpretation).

Lithia's used buyers moved up the price ladder. Cars under $20,000 were 33.8% of used sales, down from 39.2%, and cars over $50,000 rose to 7.3% from 6.2%. Of the $1,493 rise in the used average transaction price, about $1,440 came from higher prices within brands and about $53 from brand mix. Within brands, Lithia sold younger cars: 30.8% were two model years old or newer, against 28.6% a year ago.

Same-store bridge. This quarter's same-store figures compare stores, using the seller records carried in Compass, each sale is tied to the website of the store that sold it, and a store counts as comparable when Lithia had been selling through it since before July 1, 2025 and it was still selling in the quarter just ended: 278 stores, carrying 93.2% of Lithia's new sales and 93.3% of its used sales this quarter. Forty-two stores whose first Lithia sales in our data came after that date (Doral Hyundai and Atlantic Coast Acura in Florida from December 2025, Anaheim, Garden Grove and Huntington Beach Hyundai in California from January 2026, Toyota of Gallatin in Tennessee from April 2026, Kia of North Tucson from July 2026 among them) contributed 5,396 new and 4,520 used units this quarter with no year-ago equivalent; California (3,058 units), Florida (2,610) and Tennessee (1,413) lead. Eighteen stores that sold a year ago but not this quarter (Michael's Toyota in Washington, Carson Nissan in California, BMW Portland and Suburban Toyota of Farmington Hills among them) carried 2,404 new and 2,157 used units in the year-ago quarter; we have not matched them to disclosed store sales. Five stores whose volume swung more than fourfold were left out of both quarters. Lithia reported acquisitions with about $765 million of annual revenue and disposals of about $120 million in the first half (management's own disclosure). Same-store and all-store differ by 2.7 points on new and 3.0 points on used, consistent with net acquisitions. Sales that Compass records under Driveway, Lithia's online store, carry the zip code of the store that fulfilled them and are counted with that store, so a sale moving between a store's website and the Driveway record does not change the same-store total. Store-level same-store approximation built from Compass seller identifiers, not the company's certified same-store comparison; stores acquired part-way through the year-ago quarter can add partial-period noise.

By state

Florida, New Jersey and Texas account for most of the used decline, and Florida and New Jersey new sales did not fall with them. We have no disclosed store sale that explains either. We read them as a pattern to raise with the company, not as regional demand (our interpretation).

04Top Brands Sold

Why it matters: Lithia's mix is mainstream-heavy, led by Toyota and Honda, so a few brands drive its volume.

New

Toyota is the largest new brand at 22.8% of units and the fastest seller, at about five weeks. Hyundai and Kia gained unit share of their brands' markets (Hyundai 2.9% to 3.4%, Kia 1.6% to 1.9%), while BMW slipped (5.0% to 4.6%). Jeep and Ram sold furthest below sticker and took nearly four months to sell on the days-on-site clock.

Used

The used decline is spread across nearly every brand, and Lithia's unit share of each brand's used market fell by 0.1 to 0.3 points. A decline this even across brands is what a change in how many of Lithia's sales we capture would look like; it is also what a deliberate shift from volume to price would look like. Our data cannot separate the two.

05What's Sitting on the Lots (Inventory)

Why it matters: a car that sits costs the dealer interest every day, and its eventual selling price tends to drift down. A growing pile of older stock is tomorrow's clearance problem.

Used: a heavier lot. Active used units rose 3.3% from a year ago and 0.7% from June. Used stock listed more than 90 days at its selling store rose to 9.8% from 6.9% a year ago and 6.0% in June. Used Market Days Supply has sat above its typical range in both of the last two quarters, 44 in June and 45 now, against 39 a year ago. Luxury cars were 21.0% of used stock, up from 18.4%, and their over-90-day share on site rose to 12.5% from 8.8%; mainstream stock aged too, from 6.5% to 9.1%.

New: domestic brands aged. New units rose 3.4%, and the share over 90 days on site rose from 20.9% to 26.4%, though it eased from 27.1% in June. The aging is concentrated in Jeep (4,399 cars, 53.7% over 90 days on site against 25.0% a year ago) and Ram (4,333 cars, 41.3% against 19.9%). Both brands sold at deep discounts to sticker, but Jeep's discount narrowed from a year ago, so we keep this as a watch item rather than a markdown forecast. The sport-utility share of new stock is 59.0%, and 44.5% is priced above $50,000.

06Price Position: Sticker, Asking Premium and Discounts

Why it matters: these measures show where Lithia prices its cars against the sticker, against what its cars sell for, and against its own first asking price. None of them is a profit measure: they say nothing about what Lithia paid for a car or earned on it.

New, against sticker. New cars sold 2.2% below the manufacturer's suggested retail price, against 3.4% a year ago and 2.6% last quarter. Franchise dealers overall moved from 3.4% to 3.2% below, so Lithia's move (+1.1 points) was larger than the market's (+0.2 points). Hyundai, Honda, Subaru, Toyota and Audi narrowed their discounts the most; Ram and Nissan widened.

Asking premium on unsold stock. This compares the average list price of cars still for sale at September 30 with the average price of cars sold during the quarter. The two groups are different cars, so the trend matters more than the level.

The used asking premium is above our 10% watch line, but it narrowed from a year ago, and inside mainstream stock it fell below the line. The level reflects luxury cars making up more of unsold stock than of sales, not new markdown pressure (our interpretation).

Discount from first listed price. This compares each sold car's final price with the first price MarketCheck saw on its listing.

Lithia discounts more of its used cars, and further, than franchise dealers overall, as it did a year ago: the average discount per car is close to last year's, while franchise dealers' narrowed from −3.5% to −2.8%. Against the second quarter, Lithia's discount deepened by 1.4 points and franchise dealers' by 0.4 points. The monthly path was steady: −4.7% in July, −4.8% in August and −4.3% in September. On new cars, the average discount from first ask was −1.4%, against −2.1% a year ago and −1.8% for franchise dealers.

6dListing Price Position (used)

Listing Price Position compares each used car's opening asking price with MarketCheck Price, MarketCheck's model estimate of the car's market value. A ratio of 1.00 means listed at our estimate of market value; 0.95 means 5% below.

Lithia opens its used listings at almost exactly the franchise median, as it did a year ago. Its cars sold within 30 days on site three points less often than franchise dealers' did, and both slowed by about six points from a year ago. This section is descriptive and does not feed the signal.

6eSelling Margin Pressure (used)

Selling Margin Pressure measures markdowns beyond the usual on cars that took longer than usual to sell. For each price band and vehicle age, Lithia's own previous 12 months set the usual time to sell and the usual markdown on cars that sold on time. A car counts when it took longer than usual and was marked down by more than usual; the excess, in dollars, is averaged over all used cars sold.

Lithia's Selling Margin Pressure was $1,129 per used car sold, down $25 from a year ago, against a rise of $3 for franchise dealers. Against the second quarter it rose from $803, as the market's did ($805 to $1,050). This describes selling behavior only. What Lithia paid for its cars and spent reconditioning them are not in our data, so the measure is not a gross profit figure and does not feed the signal.

07Days to Sell and Market Days Supply

7aDays on Site and Days on Market (how long each car takes)

Two clocks run on every car in our data. Days on site counts only the days at the current selling store or website and restarts whenever the car moves; it is the clock a store manages its own pricing and markdowns against, and it is the aging measure this report leads with in every section. Days on market counts from the first day the car was advertised anywhere and keeps counting if the car moves to another store or another website; it is the listing's full exposure to the market, and it is analyzed here and only here. Both are shown for cars sold during the quarter and for cars still unsold on September 30.

On the days-on-site clock, used cars that sold took four days longer than a year ago (37 against 33) and six days longer than in June, and the median moved by the same amount, so the whole used book slowed rather than only its tail. New cars that sold were one day older on site than a year ago (61 against 60). The unsold new stock is ten days older on site than a year ago but no older than in June; the unsold used stock is five days older than a year ago and four days older than in June, after setting aside the cars listed more than 180 days at the same store (Section 12). The days-on-market rows tell the same story with larger numbers: cars sold took two days longer on new and four on used, and the unsold stock aged eleven days on new and four on used over the year. Where the two clocks differ in level is explained below.

What the gap between the two clocks tells us. Days on site runs below days on market by about nine days on new cars sold and six to seven days on used cars sold, and 43.0% of the new and 42.5% of the used cars Lithia sold this quarter were younger on their selling site than on the market. Those shares are the highest of the eight dealer groups we cover. The natural reading, that Lithia moves many cars between its stores before they sell, is not what the data show: only 0.3% of the new cars and 0.4% of the used cars on Lithia's lots at September 30 had changed selling store within their listing, and only 0.4% of new and 0.5% of used sales were followed by the same car reappearing at another Lithia store within 60 days. The gap sits almost entirely in one place: sales and listings that Compass records under Driveway. New cars sold under the Driveway record were younger on site than on the market 96.0% of the time, against 20.2% for cars recorded on store websites, and Driveway-recorded cars run older: new cars sold under that record had been on the market 83 days against 65 for store-website records, and unsold Driveway-recorded new stock averaged 95 days against 69 on September 30.

Our reading, which the Compass data cannot fully confirm, is that the gap is mostly a listing-channel effect rather than physical movement (our interpretation). Lithia advertises each car on its store's website, on lithia.com and on driveway.com. MarketCheck starts the market clock when it first sees the car on any of them and restarts the site clock when the record it keeps for the car switches to Driveway, so a car that has not moved can still look young on site. Two things support that reading: the gap is present from the first day a car is observed rather than appearing after a visible move, and 96.9% of the new cars with a gap have no earlier listing at any other seller in our data. The Driveway-recorded share of Lithia's sales rose by about seven points on new and five on used over the year (Section 3), so the effect is growing. What Compass cannot tell us is how much of the greater age of Driveway-recorded cars reflects a practice of routing slower sellers to the national site, and how much is the record switching as a car ages; that is one of our questions for the earnings call (Section 11). Days on site is the clock this report leads with because it is the one Lithia's stores price and mark down against; days on market, which the record switch does not affect, is the listing's full market exposure and is analyzed in this section only.

7bMarket Days Supply (how long the whole lot would last)

Market Days Supply divides the cars on hand at September 30 by the average number sold per day in the 45 days ending that date (August 17 to September 30). Each period shown uses the 45 days to its own quarter-end.

New Market Days Supply of 73 sits inside the typical range for franchise dealers (46 to 80 days). Used Market Days Supply of 45 sits above its typical range (27 to 40 days), in the elevated band (41 to 52), as it did in June. Because the used sales count may understate Lithia's sales this quarter, this figure may overstate how long the lot would last; active units alone rose 3% (our interpretation). Used stock here excludes cars listed more than 180 days at the same store (Section 12); on the unfiltered lot the figure would be 47.

Coherence check. Sold days on site divided by Market Days Supply is 84% for new and 80% for used, against the ranges in which the two normally sit, 62% to 100% for new and 76% to 114% for used, derived on sold days on site over complete quarters since 2023; both sit inside their ranges. The used ratio is taken on the unfiltered lot (Market Days Supply 47 rather than 45), because the service-loaner exclusion does not enter benchmark comparisons. On the days-on-market clock the ratios are 96% for new and 94% for used against ranges of 69% to 108% and 82% to 124%, inside their ranges, so the inventory and sales figures agree with each other on both clocks.

Against franchise dealers, brand by brand. Each figure shows Lithia's Market Days Supply for a brand as a percentage of the per-make benchmark across franchise dealers for the same brand, at the same date and on the same 45-day window. 100% means Lithia is in line with franchise dealers of the same makes; below 100% means it carries less supply than they do.

Brand by brand, Lithia's supply sits close to franchise dealers. On new, it runs heavier in Chevrolet and Ford and lighter in Jeep, one of the two brands with the oldest stock; in Ram it is in line. On used, every major brand except Hyundai (87%) is within 10% of franchise dealers; the used figures exclude the same long-listed cars as the rest of the used inventory, while the franchise benchmark does not.

08Electric Vehicle Sales

Why it matters: the federal electric-vehicle purchase credit ended on September 30, 2025, so buyers pulled purchases into the year-ago quarter. Year-over-year comparisons are against an inflated base.

New battery-electric sales fell faster than the market's 52.6%, and Lithia's share of the market's new battery-electric sales slipped from 3.2% to 2.8%. Hyundai (665) and Toyota (496) led its new electric sales. Used battery-electric sales rose 36.4% against 11.5% for the market, led by Tesla (1,017), and sold faster than a year ago.

Hybrids. Hybrids of all kinds were 33.7% of Lithia's new sales in our data, and electrified vehicles of all kinds (hybrids plus battery-electric) 37.3%. Management reported about 55% electrified and 46.5% hybrid for the second quarter. Their figure includes the United Kingdom, where mild hybrids are common, so the two are not directly comparable.

09The Positive Case

New cars outran the market. All-store new sales fell 1.8% in a new market down 3.0%, Lithia's new unit share edged up to 2.3% from 2.3%, and Hyundai, Kia and Subaru each grew by double digits or close to it.

New cars sold closer to sticker. The discount to sticker narrowed by 1.1 points, against 0.2 points for franchise dealers overall, and the average discount from first ask narrowed too. Part of this is fee inclusion in advertised prices, which affected all franchise dealers; Lithia's move was larger than theirs.

The used business moved up the price ladder. The used average transaction price rose 5.7%, almost all within brands, as cars under $20,000 fell to 33.8% of sales from 39.2%. That fits management's description of repricing lower-priced cars upward. And if our used count understates Lithia's sales, as it appears to have in the second quarter, the true used decline is smaller than the 12.1% we show (our interpretation).

10The Negative Case

The used lot is heavier and older. Active used units rose 3.3% while every measure of used sales speed slowed: sold days on site rose 4 days and used stock over 90 days on site rose to 9.8% from 6.9%. Used Market Days Supply, at 45, is above the typical range.

Lithia discounts used cars harder than its peers. Its average used discount from first ask was −4.6%, against −2.8% for franchise dealers, and it deepened by 1.4 points from the second quarter. If the used count is even partly right, Lithia sold fewer used cars into a market that fell less, while cutting more off its asking prices (our interpretation). Our data cannot say what that does to used profit per car.

Domestic new stock is aging. Jeep and Ram account for 8,732 new cars in stock, about half of them listed for more than three months, selling 8.9% and 12.8% below sticker. This is a watch item, not a markdown forecast: Jeep sold closer to sticker than a year ago.

11ADid Management Get It Right Last Quarter?

Sources: Lithia Motors Q2 2026 earnings call transcript and Q2 2026 Form 10-Q (quarterly report). "Fact" claims describe the prior quarter; "Guidance" claims describe this one.

The used-growth guidance is the one claim our data contradicts, and it is the claim our data is least able to test. We grade it Mixed rather than Refuted: the driveway.com figures point the same way as management, and our used count has recently disagreed with the company in both directions. The divergence leads the negative case only through the inventory build, which does not depend on the sales count.

11BWhat to Watch on the Earnings Call

1. Used volume. Our capture shows used sales down 12.1% (same-store −15.2%) while management guided flat to up. What was Lithia's same-store used unit change, and how much of its used business now closes through Driveway rather than store websites?
2. The heavier used lot. Used stock rose 3.3% and used Market Days Supply reached 45. Was the stock bought ahead of fourth-quarter demand, and what did the deeper discounts from first ask (−4.6% per car, against −2.8% for franchise dealers) do to used gross profit per car, which our data cannot measure?
3. New pricing. New cars sold 2.2% below sticker, closer than a year ago and closer than franchise dealers' move. Did new gross profit per car hold inside the $2,700–$2,800 range, and how much of the narrower discount is fees now included in advertised prices?
4. Domestic new stock. Nearly half of Lithia's 8,732 new Jeep and Ram cars had waited more than 90 days at their selling store at September 30. Is any brand-level clearance planned for the fourth quarter?
5. Acquisitions and the same-store bridge. Our same-store new figure is −4.5% against −1.8% for all stores, and our panel counts 42 stores added and 18 departed over the year, consistent with net acquisitions. How much did stores bought this year add, and what is the reported same-store comparison for new and used?
6. Driveway and aging. Cars that Compass records under Driveway sell four days older on site than cars recorded on store websites (64 against 60 on new), and far older on the full market clock (Section 7a). Does Lithia route slower-selling cars to the national site, and on which clock, the store's or the car's, are those cars aged and priced?

11CPost-Print Accuracy Summary (Lithia Q3 2026 Results, October 21, 2026)

What this section is: This section was added after Lithia Motors reported Q3 2026 results on October 21, 2026. Everything above it is the report as written, unchanged.

Scorecard: Of 23 vehicle-transaction calls that could be tested against what Lithia reported, 9 were confirmed, 7 were partly right and 7 were missed. Another 7 could not be tested because Lithia gave no figure for them this quarter, such as electric-vehicle sales, market share and brand-level clearance. The Neutral verdict was right for the vehicle business: same-store vehicle revenue fell 1.4% and total vehicle gross profit per unit (GPU) fell 1.6%. But the two halves ran the other way from our read. New was the weak side: same-store new units fell 2.7% and new GPU fell 6.0% to $2,624. Used was the strong side: same-store used units fell 3.2% while used GPU rose 13.3% to $1,993. Revenue was a record $9.95 billion, up 2.8%, and adjusted earnings per share (EPS) of $10.34 rose 9%, but the shares fell 10.2% on the day; finance and insurance, overhead and the share count, which drove much of the result, sit outside vehicle transactions.

What we got right: Vehicle revenue was roughly flat, as called. New same-store volume and new supply moved in the direction we reported. The used business moved up market and profit followed: we reported a 5.7% rise in the average used price, concentrated within brands, and Lithia reported a 3.9% rise in its used selling price and a 13.3% rise in used GPU. Most usefully, the report did not lean on its own used count. Our data showed used sales down 15.2% at stores Lithia owned in both years against Lithia’s 3.2%; the report flagged the count as unreliable, kept it out of the verdict and graded management’s used-volume guidance as mixed, which is how it turned out.

What we missed and why: Three readings pointed the wrong way. First, a narrower discount to sticker on new cars was read as pricing strength. Our price is the advertised price, not what the buyer paid, and Lithia’s new GPU, new margin and new selling price all fell. Second, the used lot was read as heavier because our used Market Days Supply rose, but that figure is built on the same used sales count the report had flagged as unreliable; Lithia’s own used days’ supply fell, sharply from June. Third, the positive case said new cars outran the market on all-store figures that include acquired stores; at stores owned in both years, Lithia’s new sales moved with the market. Separately, Section 11A said Lithia had not disclosed days’ supply for the second quarter, when its earnings release had: 59 days new and 60 days used at June 30. Had those figures been used, they would have flagged the gap between our used supply figure and Lithia’s before publication.

Bottom line: Read this report for revenue direction, used pricing and new supply, which held up. Treat its new-pricing read and its used inventory read with caution, and read our Lithia used unit counts only beside the company’s own figures.

12Methodology and Glossary

Where the data comes from

Primary data source: MarketCheck Compass parquet files were the primary data source: North American new and used retail sales and the daily inventory panel, filtered to Lithia Motors' dealer-group ticker. Sales cover July–September 2026 (current quarter), April–June 2026 (prior quarter) and July–September 2025 (year-ago quarter). The inventory snapshot is September 30, 2026, the true quarter-end; the data run through at least October 9, 2026. Geographic figures reflect the physical location of the vehicle.

Canada. Compass covers Canada as well as the United States, but none of its Canadian rows carry a dealer-group tag, so the Lithia figures here are its U.S. stores only. Market totals, market changes and market-share denominators are North American and include Canada (about 9.0% of captured new and 7.4% of captured used sales this quarter). On a U.S.-only basis the new market fell 3.2% and the used market 3.5%, against 3.0% and 3.5% for North America; none of this report's comparisons change direction.

Compass totals, Q3 2026: new 94,013 units and $4.5B; used 80,602 units and $2.2B; combined $6.8B.

Revenue basis. Revenue is the sum of captured selling prices and is not units times average price. The share of used sales without a captured price was 7.5% in Q3 2025, 4.2% in Q2 2026 and 1.1% in Q3 2026 (new: about 1% in each), so used revenue comparisons across these quarters understate the decline; the units-times-price figures are shown beside them.

Basis line. Inventory basis: Compass panel for unit counts, list prices and Market Days Supply. Aging basis: days on site leads every aging figure in this report (Sections 3, 4, 5, 6d, 10 and 11); days on market is shown and analyzed in Section 7a only. Days on site: the Compass site counter, re-anchored at each observed reset. Sold and active days on market: measured from the opportunity start date. The over-90-day shares count cars with more than 90 days on site at the snapshot; on the days-on-market clock the same shares are 29.9% new and 12.9% used at September 30 (24.0% and 10.5% a year ago), and the brand and class shares are higher by a similar margin. Market Days Supply: cars on hand at quarter-end divided by average daily sales in the 45 calendar days to quarter-end (ds_denominator = t45); baselines installed 2026-10-19. Lithia did not disclose days of supply for the second quarter. Where a company states the figure, it typically uses a one-month selling rate and counts stock on the lot; ours uses the 45 days to quarter-end and counts every advertised unit, and the two are compared directly with that difference stated. New-vehicle Market Days Supply counts every advertised unit, including units advertised before they reach the dealership; company-reported figures count stock on the lot and are not directly comparable.

Market share denominator. Market share is computed against MarketCheck Compass-captured North American retail transactions for the same period, not against total US registrations or company-reported deliveries. Coverage of new-vehicle retail runs approximately 80–95% of the actual market and varies by brand, so these figures are a consistent relative measure across periods, not an absolute share of the true market.

What this signal is built on, and what it does not adjust for

Volume, revenue and share in this report are what MarketCheck captured, not the company's results. The direction stated is our reading of the transaction evidence, not a forecast of Lithia's reported numbers.

Coverage record. A coverage rate (our count divided by the company's) cannot be computed for Lithia on a matching basis: Lithia reports retail units only for the whole company, including the United Kingdom and Canada, and gives no U.S.-only split, while our Lithia figures cover its U.S. stores only (no Canadian row in Compass carries a dealer-group tag). In its place we log how far our year-over-year change has been from the company's:

On the store-level same-store panel used in this report, our Q2 2026 change was −0.7% for new and −8.7% for used, against Lithia's reported same-store −2.2% and −6.1%: new was 1.5 points too high and used 2.6 points too low. The zip-code panel used in earlier drafts read −2.1% and −10.1% for the same quarter (0.1 and 4.0 points from the company). The store-level panel narrows the used gap and widens the new one, so it is not yet shown to be the more accurate of the two; it is adopted because it compares what the company compares, stores, and because it is unaffected by a sale moving between a store's website and Driveway. The gap runs in both directions and its size moves by several points from quarter to quarter. It should be assumed to recur; its size should not be assumed. Because the year-ago quarter's own gap is not known, we have not located a coverage step inside this quarter's year-over-year comparison; the call is made on the observed data, and the used volume reading is shown but not weighted, under our used-to-new rule.

What our quality checks found

Same-store panel. Stores are identified by the Compass seller website; the dealer identifier was not usable across years because its numbering changed in January 2026. A store is comparable when its first Lithia sale in our data is on or before July 1, 2025 and it sold in the quarter just ended; stores first seen after that date are treated as acquired, stores with no sales this quarter as departed, and both are left out. Stores whose volume moved more than fourfold between the two quarters, with at least 150 units in one of them, are left out of both. Driveway-recorded sales carry the fulfilling store's zip code and take that store's status; the few that match no store form one unit counted in both quarters. The company's own same-store comparison is built store by store on its own ledger; our quarter-level rule approximates it.

Inventory snapshot date. September 30, 2026, the true quarter-end; Compass inventory quarter-end: 77,072 new and 40,978 used, of which 39,776 used after the service-loaner exclusion.

Days-on-site basis for sold within 30 days. The Section 6d speed figure counts used listings started at their selling store between the first day of the quarter and September 3, so that every listing could be followed for 30 days before the data edge. A listing is sold within 30 days when its sale record carries 30 or fewer days on site, and not sold when the car reached a 31st day on site in the inventory panel; listings that disappeared unsold before day 31 are in neither count. Because the site clock restarts when a car's record switches to Driveway, a car that switched inside its first 30 days starts a new site listing, which flatters this measure slightly for Lithia relative to dealers that sell through one website. The franchise comparator is built the same way over all franchise dealers. This cohort is not the listing-day cohort used for the price-position figures above it.

Service-loaner exclusion (interim rule). Dealers keep some cars for service customers to drive and advertise them while they do, and those cars should not count as stock for sale. Pending a company-wide definition of a service loaner, every used inventory figure in this report (units, list prices, aging, asking premium, Market Days Supply and the brand-level supply comparison) excludes cars that had been listed more than 180 days at the same store on the snapshot date, read from the days-on-site counter. That removed 1,327 used cars at September 30, 956 at June 30 and 803 a year ago. The cars set aside are a mixed group: at September 30 they averaged 301 days on market and a $40,463 list price, 25.9% had under 10,000 miles, and the rest averaged 59,077 miles, so the rule removes aged used stock as well as loaners, and the used aging figures are correspondingly gentler than on the unfiltered lot (Active DOM 45 days against 53; over-90-day share 12.9% against 16.2%; Market Days Supply 45 against 47). New inventory is not filtered: the 7,221 new units over 180 days on site average 302 miles and 271 days on market and are aged stock, not loaners. Sold figures are unchanged.

State notes. Florida, New Jersey and Texas used sales fell more than 14% with no matching store sale on record. Same-rooftop continuity and MarketCheck coverage stability at those stores have not been independently checked.

Listing Price Position. Listing Price Position compares each used car's opening asking price with MarketCheck Price, MarketCheck's model estimate of the car's market value, at the listing's first recorded status change. It describes where the dealer set the price, not what the car sold for. The year-ago quarter lacks MarketCheck Price for its first four days. This quarter's position (−0.001) sits just above Lithia's observed range (−0.005 to −0.002), worth noting but not a stop.

Directional read for grading. Lithia's used listing position against franchise dealers moved by +0.001, from −0.002 to −0.001. Under the grading rule, that is logged as no directional read for used gross profit per car. It is recorded for the post-earnings accuracy review only and does not feed the signal.

Lenses. Selling Margin Pressure (Section 6e) is descriptive and does not feed the signal. Brand equity erosion is not applied because no single brand dominates Lithia's mix. Used volume is shown in its own row and not weighted. Overhead is outside our data; falling same-store new volume would tend to weigh on it, while Lithia reports an active cost program that cut overhead as a share of gross profit to 68.6% in the second quarter, so we take no view.

What we cannot see

Outside MarketCheck's scope for Lithia: Finance & Insurance income; parts, service and collision work; Driveway Finance Corporation; the United Kingdom and Canadian operations; fleet management; wholesale and auction sales; gross profit per vehicle; floor-plan interest and overhead; and fleet sales not advertised at retail.

Sources of figures. Every figure in this report comes from MarketCheck data unless the text names another source, such as a company filing or management's comments on its earnings call. Only figures from those other sources carry a source label.

Plain-English Glossary

Prepared by MarketCheck Research using the Anthropic Claude LLM. This report describes North American retail vehicle transaction activity only and is not investment advice.

We welcome your feedback. To offer comments, suggestions for future coverage, or to inquire about licensing this report or the MarketCheck data behind it, including vehicle-level sales, inventory and pricing data, contact Bryant Sheehy at bryant.sheehy@marketcheck.com.