If you’ve been holding out for the “perfect” car deal, the ground is shifting under your feet in an unexpected way. For most of the past year, electric vehicles were the undisputed discount kings of the car lot, while gas-powered models barely budged on price. That gap is now starting to close from both directions — and it changes the math for anyone shopping in the second half of 2026.
Why EV Discounts Ballooned in the First Place
When the $7,500 federal EV tax credit expired for vehicles acquired after September 30, 2025, automakers scrambled to soften the blow for buyers. The result was a wave of automaker-funded rebates, cut-rate leases, and 0% financing offers designed to keep EVs moving off dealer lots. By early 2026, those efforts pushed EV incentives to record territory — averaging around 14% of a new EV’s transaction price, or roughly $7,600 to $7,900 per vehicle, according to Cox Automotive’s Kelley Blue Book data. That’s nearly double the incentive rate on the overall new-car market.
Those discounts worked, at least partially. The average new EV price fell for eleven straight months year-over-year, and the price premium of a new EV over a comparable gas model narrowed to roughly $5,800 to $6,500 by spring 2026 — the smallest gap on record. Used EVs closed the gap even further, sitting within about $1,000 to $1,300 of comparable used gas vehicles.
The Shrinking Part
Here’s the twist: that incentive spending appears to have peaked. Cox Automotive’s June 2026 EV Market Monitor shows incentives easing to about 13% of transaction price — roughly $7,290 per vehicle — down from 14% in May. New EV inventory, while still elevated compared to gas vehicles, is being managed more carefully as automakers throttle back production plans that no longer make sense without the government backstop. EV sales fell 27% year-over-year in the first quarter of 2026, and while the decline has slowed, automakers are showing more pricing discipline rather than continuing to chase volume at any cost.
Meanwhile, Gas Car Deals Are Waking Up
On the gas-powered side, a different pressure is building. Tariff-driven cost increases have pushed 2026 model-year prices up by roughly $2,000 on average — a sharp jump from the typical $400 model-year bump seen in prior years, with 23 models seeing increases of at least $2,000. At the same time, dealers are still sitting on more than 200,000 leftover 2025 models they need to clear before the pricier 2026 inventory takes over the lot. That combination is pushing automakers toward more aggressive 0% financing offers and cash rebates on gas vehicles than buyers have seen in years, even as overall industry incentive spending has hovered around a comparatively modest 7% of transaction price.
What This Means for Your Next Purchase
- If you want an EV: The window for outsized EV discounts hasn’t slammed shut, but it’s narrowing. Several mainstream electric models, including the Hyundai IONIQ 5, Kia EV9, Toyota bZ, and Ford F-150 Lightning, still carry 0% financing offers as of this summer. If a deal looks good today, it may not look as good in a few months.
- If you’re cross-shopping used: Used EVs are arguably the quieter opportunity right now. A growing wave of lease returns — expected to add roughly 329,000 vehicles to the used market in 2026 — is pushing used EV prices down toward parity with gas cars, without you having to time an incentive window at all.
- If you want a gas car: Look hard at leftover 2025 models still on dealer lots. With tariff-driven price hikes baked into 2026 inventory, dealers have real incentive to move older stock now with rebates and low-rate financing before those units disappear.
- Either way: Don’t judge a deal purely by the incentive headline. A low EV lease payment can hide a short mileage allowance or steep due-at-signing costs, and a “0% APR” gas offer may only apply to specific trims or credit tiers.
The Bottom Line
The EV-versus-gas deal gap hasn’t disappeared — EVs are still discounted roughly twice as heavily as the average new gas vehicle. But the trend lines are converging: EV incentives are coming off their post-tax-credit peak, while gas car deals are inching upward as automakers try to counteract tariff-driven sticker shock. For shoppers, that means the calculus is shifting from “EVs are the obvious deal” to “compare carefully, because both sides of the market are moving.” Whichever powertrain you choose, the smartest move right now is to shop the specific offer in front of you rather than assume last year’s pattern still holds.