Hybrid vehicle sales are surging, driving an increase in their share of new-vehicle financing in the second quarter of 2026, according to Experian’s latest report. This shift, buoyed by affordability and manufacturer incentives, has seen hybrids’ share rise to 16.8%, outpacing both electric vehicles (EVs) and internal combustion engine (ICE) vehicles.
Affordability Drives Hybrid Sales
On average, monthly payments for hybrid vehicles are lower than those for EVs or ICE vehicles. In Q2, the average monthly payment for a new hybrid vehicle loan was $646, compared to $692 for EVs and $721 for ICE vehicles. This affordability appears to be a major driver of hybrid sales. Melinda Zabritski, head of automotive financial insights for Experian Automotive, attributes this to incentives from original equipment manufacturers (OEMs). “It looks subvented,” she said, indicating that manufacturer support is making hybrids more affordable.
In the second quarter of 2026, the average monthly lease payment for a hybrid vehicle was $566, while it was $641 for EVs and $602 for ICE vehicles. This trend shows that OEMs are not only making hybrids more affordable through lower interest rates but also through more attractive lease terms.
-breaking down the numbers, in Q2 2026, the average interest rate for new hybrid vehicle loans was 6.35%. This was significantly lower than the average interest rate for new EV loans (7.2%) and ICE vehicle loans (7.5%). This discrepancy suggests that OEMs are offering substantial incentives to make hybrid vehicles more affordable.
Manufacturer Incentives Boost Hybrid Sales
The report doesn’t provide data on incentives, but Zabritski notes that many top-selling hybrids had average interest rates below the industry average. For instance, the Subaru Crosstrek had an average interest rate of about 3.2%, the Mazda CX-50 Hybrid 4.3%, and the Hyundai Tucson Hybrid 4.2%, compared to the overall average of 6.4% in Q2. These low-interest rates indicate that OEMs are providing significant incentives to boost hybrid sales.
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Captive finance companies, which typically have exclusive access to OEM incentives, dominate financing for hybrid vehicles. This dominance is reflected in the top-financed hybrids list, with three out of the top five being Toyota models (Toyota Camry, Toyota RAV4, and Toyota Grand Highlander) and the other two being Honda models (Honda CR-V and Honda Accord). This trend suggests that OEMs are heavily supporting the sales of their hybrid models through finance incentives.
Toyota, a long-time proponent of hybrids, accounted for three of the top five most-financed hybrids, led by the Toyota Camry. This dominance is not just driven by their extensive line-up of hybrid models but also by the competitive finance incentives they offer. For instance, the average interest rate for the Toyota Camry hybrid was about 6.3%, while that for the Toyota RAV4 hybrid was around 6.5%. These rates, while slightly higher than some other top-selling hybrids, are still competitive and reflect Toyota’s commitment to promoting hybrid vehicle adoption.
Honda, another major player in the hybrid market, accounted for the other two of the top five most-financed hybrids, namely the Honda CR-V and Honda Accord. The average interest rate for the Honda CR-V hybrid was around 6.2%, and for the Honda Accord hybrid, it was about 6.4%. These rates, again, are competitive and show that Honda is also heavily invested in promoting hybrid vehicle sales.
Comparatively, the average interest rates for the top-selling EVs were significantly higher. The average interest rate for the Tesla Model Y, for example, was around 7.5%, and for the Chevrolet Bolt EV, it was about 7.8%. This disparity in interest rates highlights the extent to which OEMs are incentivizing hybrid vehicle sales compared to EV sales.
According to Experian, hybrids accounted for 16.8% of new-vehicle financing in Q2 2026, up from 13% in Q2 2025, while the EV share of new-vehicle financing declined to about 8.2%, from 9.2% a year ago. This trend suggests a shift in consumer preference towards more affordable hybrid vehicles, possibly due to the loss of EV tax breaks, high gas prices, and the Iran war.
