Used car wholesale prices slide in Q3 as gas costs push buyers toward EVs and small cars

Used car wholesale prices fell faster than expected through the summer and into September, prompting Cox Automotive to sharply cut its full-year 2026 price forecast — and revealing a market increasingly divided between fuel-efficient vehicles that buyers want and gas-hungry trucks and SUVs they are walking away from.

The Manheim Used Vehicle Value Index — the benchmark that tracks prices at U.S. wholesale auctions and typically predicts where retail prices head next — dropped to 205.9 in September, down 0.6% from a year earlier and 1.1% from August after adjustments for vehicle mix, mileage, and seasonality, according to Cox Automotive. On an unadjusted basis, wholesale prices were down 1.2% compared with the same month a year earlier and 1.3% compared with August, with depreciation picking up pace across the third quarter.

September was the first month since March 2025 that the monthly index had not been higher than a year earlier — a milestone that pushed Cox Automotive to revise its year-end outlook. The company now expects the index to finish 2026 up just 0.2%, down from the 2% gain it had forecast as recently as July. The long-term historical average for the index is a 2.3% annual gain.

We are in the weakest season for wholesale valuations, and as September closed, depreciation was steeper than we typically see this time of year. The first half of the year actually showed more appreciation than usual, even in the face of higher fuel prices. 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.— Jeremy Robb, Chief Economist, Cox Automotive

The clearest driver of the split in the market is fuel cost. At $4.33 per gallon nationally in September — 50 cents higher than the previous September record of $3.83, set in 2023 — gasoline prices were running well above recent norms, according to AAA, as cited by Cox Automotive. That pressure is reshaping what buyers want and, in turn, what dealers can charge.

Electric vehicles and compact cars are the clear beneficiaries. Compared with the second quarter, wholesale EV sales at Manheim auctions climbed 22%, and they were up 45% from a year earlier; EVs made up a record 4.9% of all Manheim transactions in Q3, versus 3.9% the quarter before. Cox Automotive reported that used retail EV sales came to roughly 124,000 units in the third quarter, the highest total on record and a gain of 11.4% year over year. EV days' supply at auction fell as demand climbed, and EV values increased during the quarter.

Diesel vehicles told the opposite story. Although diesel vehicles account for just over 3% of wholesale inventory, record-high diesel prices drove days' supply for those units up to 39 days — a 27% increase from a year earlier — as consumer interest waned, according to Cox Automotive.

Demand and values for large pickups and SUVs both fell during the quarter, reflecting the outsized effect of higher fuel costs on those segments. Midsize cars also trended down. Older, more affordable vehicles depreciated less, as demand in that segment remained relatively firm.

The high cost of fuel is beginning to show up in the Manheim data. Diesel represents a small share of all units on the ground — just over 3% — but we're seeing a clear downward effect on valuations as diesel prices hit all-time highs, and days' supply for those vehicles is rapidly rising. Meanwhile, EV days' supply has fallen, as sustained high gas prices push more consumers toward fuel-efficient used vehicles.— Jeremy Robb, Chief Economist, Cox Automotive

Cox Automotive also flagged an unusual seasonal factor: September 2026 was the first September in decades without an Atlantic hurricane. Storms typically generate a surge in used-vehicle demand — replacing flood-damaged cars — that softens depreciation. Without that boost, depreciation ran hotter than normal for the time of year.

For everyday car shoppers, the wholesale declines matter because retail prices traditionally follow wholesale costs. Cox reported that the average listed price of a used vehicle stood at $27,239 as of August, a figure that contrasts sharply with the more than $50,000 average for new vehicles. Cox said retail demand for used vehicles remains relatively healthy, but the pricing shifts appear to signal that dealers have hit a ceiling on what consumers will pay.

Cox Automotive nudged its total used-vehicle sales forecast for 2026 slightly higher, to 38.5 million units — roughly in line with 2025 — with retail used-vehicle sales projected at 20.5 million units. The certified pre-owned segment is projected at 2.6 million units, a figure that is unchanged from the prior forecast and represents a 1.8% decline year over year. At approximately 11.8 million units, total wholesale volume in 2026 is expected to edge up less than 1% from 2025 levels.

Looking further ahead, the supply of used EVs is set to grow substantially as off-lease vehicles return to market. In the first half of 2026, EVs made up about 10% of off-lease supply; that share is projected to climb to roughly 16% in the second half of the year and approach 19% by summer 2027. Off-lease supply overall moved from approximately 190,000 units per month in the first half of 2026 to around 220,000 units per month in the second half, a trajectory that Cox anticipates will help drive wholesale volume growth of about 3% in 2027.

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. Many metrics we watch are converging back toward pre-pandemic norms, but the road to get there has been anything but smooth.— Jeremy Robb, Chief Economist, Cox Automotive

Cox Automotive said it is also monitoring potential policy changes following the midterm elections and the timing of Chinese EV imports as variables that could shape the market in 2027.

Why it matters — For the majority of Americans who buy used rather than new cars, wholesale price trends directly predict what they'll pay at dealerships — and the data now shows a market where your choice of vehicle type, not just your budget, increasingly determines whether you're getting a deal or overpaying.

Reported by prnewswire.com, coxautoinc.com, cnbc.com, carfax.com