- Cox Automotive cut its 2026 used vehicle price forecast from a 2 per cent rise to just 0.2 per cent.
- Wholesale used vehicle prices fell 1.2 per cent year over year in September.
- Fuel-efficient cars and EVs are holding up better as gas prices remain elevated.
The US used car market is losing momentum, with Cox Automotive cutting its forecast for used vehicle prices to just a 0.2 per cent increase this year, down from its previous prediction of a 2 per cent rise.
That would mark a third consecutive year of relatively flat pricing after the sharp swings seen during and after the pandemic.
The revision comes as higher fuel prices and borrowing costs put pressure on household budgets. Cox's Manheim Used Vehicle Value Index, a closely watched measure of wholesale used-car prices, fell 1.95 per cent between July and September, including a 0.6 per cent year-over-year decline in September.
It was the first time since March 2025 that the index had not been higher than a year earlier.
Why are used car prices cooling?
Several forces are now converging to take some heat out of the market.
Interest rates remain elevated, making vehicle financing more expensive, while consumer confidence has weakened. At the same time, higher fuel prices are changing what buyers are willing to pay for different types of vehicles.
Cox Automotive chief economist Jeremy Robb said the market was moving back towards conditions seen before the pandemic, although the adjustment had been uneven.
“As we enter Q4, interest rates are rising, consumer sentiment is falling, and yet a wealth effect from strong and sustained financial-asset growth is providing some offsetting cushion,” Robb said.
“Many metrics we watch are converging back toward pre-pandemic norms, but the road to get there has been anything but smooth.”
Non-adjusted wholesale used vehicle prices fell 1.2 per cent year over year in September and 1.3 per cent from August, according to Cox, as depreciation accelerated during the third quarter.
The historical average for the Manheim index is about a 2.3 per cent annual increase, making the latest forecast particularly subdued.
There is also more supply coming through the market. Growing numbers of off-lease vehicles are reaching the used market, while the availability of new vehicles has improved from the shortages that followed the pandemic-era supply disruptions.
For consumers, that means dealers may have less room to keep raising prices.
Cox said retail demand for used vehicles remained relatively healthy, but pricing suggested dealers had reached a ceiling on what many consumers were willing or able to pay.
The average listed price of a used vehicle was $27,239 in August, compared with more than $50,000 for a new vehicle.
Which used cars are holding their value?
The market is increasingly splitting between fuel-efficient vehicles and larger, less efficient models.
Cox said EV sales and off-lease volumes continued to grow, while smaller and more fuel-efficient vehicles increased in value during the quarter. Large trucks and SUVs, meanwhile, performed poorly.
That shift is becoming more significant as fuel costs rise.
The national average price of gasoline was $4.33 a gallon in September, according to AAA. That was 50 cents higher than the previous September record of $3.83, set in 2023.
Diesel prices have also climbed sharply amid the ongoing conflict in the Middle East, adding to transportation and household costs.
Robb said the first half of the year had produced stronger-than-usual price appreciation despite higher fuel costs, but conditions changed as the economic pressure intensified.
“But with the conflict in the Middle East ongoing, diesel prices at record highs, and interest rates climbing rapidly, increasingly worrying both businesses and consumers, wholesale prices have felt the sting,” he said.
The result is a market where fuel economy is becoming a bigger factor in residual values. Hybrids, plug-in hybrids, EVs and smaller petrol cars can look increasingly attractive when running costs are high, while buyers of large trucks and SUVs face greater depreciation risk.
That does not necessarily mean every used EV will become more expensive or every large vehicle will fall sharply. But the direction of the market suggests that running costs are becoming increasingly important alongside the purchase price.
Is this a good time to buy a used car?
For buyers, the cooling market could provide more negotiating power, particularly for vehicles that are depreciating faster.
But a lower vehicle price does not automatically mean a cheaper purchase. Higher interest rates can increase the total cost of financing, while insurance, fuel and maintenance remain important parts of the ownership equation.
The biggest opportunity may therefore be for buyers willing to shop around rather than simply looking for the cheapest sticker price.
Fuel-efficient models could offer a stronger combination of purchase price and running costs, while buyers considering larger trucks or SUVs may have more room to negotiate as demand and resale values soften.
For sellers and dealers, the shift creates a different challenge. Inventory needs to match what consumers can afford and what they want to drive, rather than relying on the broad price increases seen during the pandemic period.
The latest forecast does not point to a collapse in used-car prices. Instead, it suggests the market is becoming more selective, with higher borrowing and fuel costs increasingly influencing which vehicles hold their value.
For American consumers, that could mean one of the clearest changes in the used-car market since the pandemic: the cheapest car to buy may not necessarily be the cheapest car to own.
