Used car prices fall in Q3, while demand for fuel-efficient vehicles grows
DETROIT — Used vehicle prices are forecast to fall more than previously expected this year, as high gas prices and broader inflationary costs hit Americans' pocketbooks. Cox Automotive on Wednesday lowered its forecast for the company's Manheim Used Vehicle Value Index, from a 2% increase to a rise of only 0.2% for the year. That slight uptick would mark the third consecutive year of relatively flat pricing after large increases and then declines during the pandemic. The lower forecast follows a 1.95% decline in the index from July to September, including a 0.6% drop in September compared with a year earlier. September marked the first time since March 2025 that the monthly index hadn't been higher than a year earlier. "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," Cox Automotive's chief economist, Jeremy Robb, said in a release The historical average for the Manheim index is about a 2.3% year-over-year gain. Nonadjusted wholesale used vehicle prices fell 1.2% year over year in September and 1.3% from August as depreciation accelerated in the third quarter, Cox said. The index is a closely monitored gauge for used vehicle prices that tracks the pricing of used vehicles sold at Manheim U.S. wholesale auctions. Retail prices for consumers traditionally follow changes in wholesale costs. Cox noted electric vehicle sales and off-lease volume continued to grow, reshaping used vehicle market dynamics as EVs and smaller, fuel-efficient vehicle values increased during the quarter. That compares with poor performances of large trucks and SUVs, the company said. "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," Robb said. The juxtaposition in smaller, fuel-efficient cars and larger vehicles occurred as the national average of gas in September was $4.33 per gallon. That was 50 cents higher than the previous September record of $3.83 set in 2023, according to AAA. Cox said retail demand for used vehicles is relatively healthy, but the pricing changes seem to be signaling dealers have hit a ceiling on what they can charge consumers. The average listed price of a used vehicle was $27,239 as of August, according to Cox. That compares with new vehicles at an average price of more than $50,000. The majority of U.S. consumers purchase used vehicles since they're more affordable than new models.