Tax Refunds Are Surging in 2026. Are Dealers Ready?
Tax season has always been a strong sales period for used car dealers, but 2026 is shaping up to be one of the biggest yet. In fact, tax season consistently represents the second-largest sales peak of the year, and unlike other spikes, it is also the longest-lasting, stretching demand over several months rather than weeks.
According to Cox Automotive, tax refunds are projected to increase by an average of $750, bringing the national average refund to a record-high $4,050 for the filing year of 2026. That increase puts more buying power directly into consumers’ hands and creates a short window of opportunity for prepared dealers.
Why Tax Season Drives Used Car Sales
Tax refunds often become down payments or cash purchases, especially for used vehicle buyers. Even a few hundred extra dollars can significantly improve affordability, pushing shoppers from browsing to buying. Because tax season demand builds gradually and lasts longer than other sales peaks, dealers who are properly stocked can benefit from steady traffic and consistent sales velocity throughout the season. Historically, higher refunds lead to increased demand for used inventory, particularly in value-driven and credit-sensitive markets.
Local Increases Mean Local Opportunity
Refund growth varies by state, with some markets seeing increases approaching or exceeding $1,000. Dealers who understand their local demand and act promptly are best positioned to capture tax season sales before inventory becomes scarce and before competitors do.
The Risk: Demand Without Inventory
The biggest tax season mistake isn’t marketing, it’s inventory. Dealers often miss opportunities because they can’t move fast enough at auction or don’t want to tie up cash ahead of tax season. When demand stretches over months instead of weeks, running short on inventory mid-season can be just as costly as missing the early rush.
How Floorplan Xpress Helps Dealers Prepare
Dealer floor plan financing allows you to stock inventory ahead of demand without draining working capital.
With Floorplan Xpress, dealers can:
- Buy inventory earlier
- Move quickly at the auction
- Preserve cash flow
- Turn inventory faster during peak tax season
Tax season doesn’t all happen at once, but it rewards dealers who are prepared early and stay stocked through the finish line.
Fill out a contact us form here to learn more!