Inflation Eases, but Higher Financing Costs Continue to Shape Fleet Decisions
June brought encouraging inflation news as both the Consumer Price Index (CPI) and Producer Price Index (PPI) declined for the first time since last summer, largely due to falling energy prices. Gasoline costs dropped sharply, helping ease overall inflation, while new-vehicle prices, used-vehicle values, and auto parts pricing remained relatively stable. Automotive retail sales also strengthened during the month, signaling continued consumer demand even as the broader economy showed signs of moderating.
Lower fuel prices and easing insurance costs should help offset some operating expenses, but financing remains a challenge. Markets are increasingly expecting interest rates to stay elevated, keeping borrowing costs high for vehicle acquisitions and lease financing. At the same time, wholesale used-vehicle values are returning to more typical seasonal depreciation after a strong spring, creating a more predictable environment for replacement planning and vehicle remarketing. Together, these trends point to a market that is stabilizing rather than weakening, with disciplined planning remaining essential for controlling fleet costs.
Polestar to Exit U.S. Market Beginning with 2027 Model Year
Polestar will no longer be able to sell new model-year 2027 vehicles in the United States after the U.S. Department of Commerce denied the company's authorization under the Connected Vehicle Rule. While Polestar will continue selling its existing inventory of Polestar 3 and Polestar 4 models and support current customers, future products—including the Polestar 5, the next-generation Polestar 2, and the Polestar 7 SUV—will not be available in the U.S. The decision highlights the expanding impact of federal regulations governing connected vehicle technology, which apply regardless of where a vehicle is assembled.
IRS Increases Business Mileage Rate to 76 Cents Per Mile
The Internal Revenue Service has increased the 2026 standard business mileage reimbursement rate from 72.5 cents to 76 cents per mile, effective July 1, 2026. The 3.5-cent increase was driven primarily by higher fuel prices and marks only the fifth mid-year adjustment since 2000. While fuel costs prompted the change, the IRS mileage rate also accounts for vehicle ownership expenses such as maintenance, insurance, depreciation, and financing.