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The third quarter of 2025 presented a balancing act for fleet managers. Tariffs and rising input costs continued to pressure budgets, but the first interest-rate cuts in months offered welcome financing relief. At the same time, steady fuel prices provided breathing room during peak driving season, while used vehicle values, though softening, remained well above historical averages. Together, these dynamics highlight both risks and opportunities as fleets plan for the months ahead.
Big picture: Q3 brought both headwinds and opportunities as tariffs and inflationary pressure remain, but lower interest rates and stable fuel prices offer relief.
Economics: First rate cuts from the Federal Reserve and Bank of Canada signal a turning point, yet tariffs are still raising costs across vehicles, parts, and services.
Fuel: A “cheap summer” at the pump gave fleets budget breathing room; forecasts point lower still, though storm season remains a risk.
Remarketing: Used vehicle values eased modestly but stayed strong overall, with compact/midsize units and EVs holding especially firm.
Big picture: Q3 brought both headwinds and opportunities as tariffs and inflationary pressure remain, but lower interest rates and stable fuel prices offer relief.
Economics: First rate cuts from the Federal Reserve and Bank of Canada signal a turning point, yet tariffs are still raising costs across vehicles, parts, and services.
Fuel: A “cheap summer” at the pump gave fleets budget breathing room; forecasts point lower still, though storm season remains a risk.
Remarketing: Used vehicle values eased modestly but stayed strong overall, with compact/midsize units and EVs holding especially firm.
The third quarter of 2025 brought a mix of pressures and opportunities for fleets. Tariffs and broader cost pressures remain a challenge, but there was finally some relief on the financing front as both the U.S. Federal Reserve and the Bank of Canada nudged rates down for the first time in months. At the same time, fuel prices have held unexpectedly steady, marking a welcome reprieve during the busy summer driving season. Also, used vehicle values, while easing, remain well above historical norms.
In this quarter’s update, we’re focusing on three fleet industry trends with the most immediate impact.
Tariffs introduced earlier this year are starting to make themselves felt in everyday fleet costs. Wall Street leaders are reporting early signs of tariff-related price increases showing up in customer behavior, and U.S. inflation data backs this up as consumer prices rose 2.7% year-over-year in June and July.
For fleets, this means higher costs for vehicles, parts, and maintenance services are not just a possibility, they’re already here. Fleet managers should be preparing for this trend to accelerate if additional trade actions are introduced.
In mid-September 2025, both the U.S. Federal Reserve and the Bank of Canada made their first rate cuts in several months, a clear signal that monetary policy is shifting. The Fed trimmed its benchmark rate by 25 basis points, bringing it to a target range of 4.00-4.25%. Meanwhile, the BoC dropped its key policy overnight rate by 25 basis points to 2.50%, its lowest in three years.
For fleets, this development carries real implications. Financing new vehicle purchases or refinancing could become modestly less costly in the coming months. The shift also means budget planners should update models to reflect easing interest burdens, which may open up room to accelerate acquisitions or upgrade specs.
Despite the current economic environment, consumers are still buying. U.S. retail sales for new and used vehicles rose in July, signaling confidence that’s keeping demand for vehicles robust. This resilience helps prop up prices, which is good news if you’re remarketing fleet vehicles, but makes acquisition budgets harder to stretch.
It also reinforces the need to watch timing carefully: strong consumer demand means less negotiating leverage with OEMs and dealers, and competition for popular models will remain stiff through Q4.
Build tariff-related cost buffers of at least 2-3% into budgets for parts, service, and acquisitions.
Keep a close eye on consumer demand trends, since strong retail sales could mean fleets will face tougher competition for vehicles and may need to adjust the timing of acquisitions.
Fleets caught a break at the fuel pumps this quarter. U.S. gasoline averaged about $3.16/gal in August, with diesel at $3.74/gal, both down year-over-year. Canadian averages were similarly calm, at C$1.44/L for gas and C$1.55/L for diesel.
This is in sharp contrast to the volatility fleets faced just a few years ago. The Q3 fuel price chart shows this stability clearly, and importantly, it suggests that current budgets may be running under plan, freeing up dollars for other priorities.
Sources: Today in Energy Daily Prices - U.S. Energy Information Administration (EIA), Kalibrate, Short-Term Energy Outlook - U.S. Energy Information Administration (EIA),
Behind the scenes, U.S. refineries were working overtime. Operating at nearly 94% of capacity in July, they hit their highest utilization of the year. This robust output helped prevent the seasonal summer spike in fuel prices. In fact, seasonal gas prices remain at their lowest point since the summer of 2021.
For fleets, it has meant a predictable and more manageable cost environment through peak driving months. This stability also makes it easier to forecast budgets with confidence, reducing the need for emergency surcharges or mid-quarter adjustments. For companies with long-haul operations, consistent refinery output has helped smooth regional price disparities, making route planning and bulk purchasing strategies more straightforward.
Looking ahead, the U.S. Energy Information Administration (EIA) projects gas to average $3.09/gal in 2025 and dip further to $3.04 in 2026. Diesel is expected to follow a similar downward path. The Q3 fuel price chart highlights this easing trend. That said, risks remain: hurricane season, which peaks in Q3, could disrupt Gulf Coast refineries and pipelines, while geopolitical tensions could drive sudden spikes.
Looking ahead, fleets that lock in multi-quarter fuel strategies now, such as negotiated supplier contracts or regional hedging programs, will be in the best position to capture savings if the forecast holds, while still insulating themselves against sudden shocks.
Consider allocating fuel savings toward preventive maintenance or safety initiatives.
Keep contingency plans ready for hurricane disruptions or global oil market shocks.
After holding firm earlier in the year, wholesale prices began to ease in mid-summer. In the U.S., values fell 0.7% in the first half of July, while Canadian wholesale markets also saw a modest decline of 0.35% for the week. The Q3 Manheim Used Vehicle Value Index shows this gradual step-down: from 208.5 in June to 207.4 in July, and 206.5 mid-August. While these are small moves, they mark the beginning of a return toward more typical depreciation, an important signal for fleets deciding when to remarket older units.
While July saw a slight month-to-month dip, used EV sales remain sharply higher than last year. That’s a reflection of growing consumer appetite for affordable electrified vehicles, bolstered by a steady flow of off-lease EVs entering the secondary market.
For fleets, this means EVs are moving from a remarketing outlier towards becoming a viable option with healthy demand. EV residuals are tracking well compared to many ICE segments, giving fleets confidence in resale values.
Even in a softening market, older compact and midsize vehicles are holding their value especially well. These segments are benefiting from affordability pressures as consumers are seeking lower-priced options while new vehicle sticker prices climb.
For fleets, this creates a sweet spot: remarketing smaller sedans and midsize SUVs can yield stronger returns, helping offset the elevated costs of new acquisitions.
Accelerate disposals of older units to capture elevated values before further softening.
Prioritize remarketing compact and midsize vehicles, where demand remains strongest.
Looking at the key fleet management trends, this quarter brought both challenges and opportunities. Tariffs and high interest rates continue to weigh on fleet budgets, but stable fuel prices have provided breathing room. Meanwhile, used vehicle values, though easing, continue to be a valuable lever for cost recovery.
As you plan for Q4, keep flexibility top of mind. Adjust budgets where relief is real, prepare cushions where risks loom, and time remarketing to take advantage of segments still performing well. By staying proactive, fleets can turn today’s uncertainty into tomorrow’s advantage.
If you’re looking for deeper insights tailored to your business, our Strategic Advisory Services team can help you navigate these fleet industry trends with confidence.