Used car prices fall in Q3 as record gas costs and rising rates squeeze buyers

Cox Automotive cuts 2026 forecast; fuel-efficient vehicles and EVs gain value while trucks and SUVs lag

By LineZotpaper

Published8 October 2026

Read Time2 min

Sources2 outlets

Used vehicle prices fell more sharply than expected in the third quarter, and Cox Automotive has cut its full-year forecast, as record gas prices, rising interest rates and broader inflationary pressures hit American buyers while demand shifts toward fuel-efficient cars and electric vehicles.

Cox Automotive on Wednesday lowered its forecast for the Manheim Used Vehicle Value Index, a closely watched gauge of wholesale used vehicle prices, from a 2% increase to a rise of just 0.2% for the year. That would mark the third consecutive year of relatively flat pricing after large increases and declines during the pandemic.

The index fell 1.95% from July to September, including a 0.6% decline in September compared with a year earlier. It was the first month since March 2025 that the monthly index had not been higher than a year earlier. Non-adjusted wholesale prices fell 1.2% year over year in September and 1.3% from August as depreciation accelerated.

"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," Cox Automotive chief economist Jeremy Robb said in a release. "Many metrics we watch are converging back toward pre-pandemic norms, but the road to get there has been anything but smooth."

The market's shifts favored smaller vehicles. Cox said electric vehicle sales and off-lease volume continued to grow, and values of EVs and smaller, fuel-efficient vehicles increased during the quarter, while large trucks and SUVs performed poorly. The contrast came as the national average gas price reached $4.33 per gallon in September, 50 cents above the previous September record of $3.83 set in 2023, according to AAA.

Robb cited the ongoing Middle East conflict, record diesel prices and rapidly climbing interest rates as weighing on wholesale prices. Cox said retail demand for used vehicles remains relatively healthy, but the pricing changes suggest 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, compared with an average of more than $50,000 for new vehicles. Retail prices for consumers traditionally follow movements in wholesale costs.

Analysis

Why This Matters

After pandemic-era price spikes, a third straight year of flat used car pricing points toward a market returning to normal for buyers.
Dealers appear to have hit a ceiling on what consumers will pay, and lower wholesale prices could eventually show up on forecourts.
The rising value of fuel-efficient vehicles and EVs, against weak trucks and SUVs, shows how record pump prices are reshaping buyer choices.

Background

Used vehicle prices ballooned during the pandemic as supply chain disruptions and semiconductor shortages constrained new car production, pushing buyers into the used market and prices well above historical norms. The Manheim index, which tracks wholesale prices at Manheim auctions across the US and has historically risen about 2.3% a year, has since swung through sharp declines into three years of flat pricing. Because retail prices traditionally follow wholesale costs, the index is a leading indicator for what consumers pay.

Key Perspectives

Cox Automotive: Sees the market converging back toward pre-pandemic norms, with depreciation accelerating. Its chief economist points to rising interest rates, falling consumer sentiment and record diesel prices, partially offset by a wealth effect from strong financial-asset growth. Dealers: Retail demand is relatively healthy, but pricing data suggests they can no longer push prices higher, and growing volumes of off-lease vehicles and EVs are adding to supply. Consumers: Face average gas prices of $4.33 a gallon and higher borrowing costs, yet demand for fuel-efficient vehicles and EVs is strengthening, and any continued wholesale declines could bring retail relief.

What to Watch

Whether September's year-over-year decline in wholesale prices deepens and flows through to retail listings in coming months.
The path of interest rates and diesel prices, which Cox says are increasingly worrying both businesses and consumers.
How continued growth in EV sales and off-lease volume reshapes used-vehicle values by segment, especially for large trucks and SUVs.

Sources

Used car prices fall in Q3, while demand for fuel-efficient vehicles grows — US Top News and Analysis
Used car prices fall in Q3, while demand for fuel-efficient vehicles grows — Business News