A benchmark for used vehicle pricing in the United States has climbed to its highest level in nearly three years, underscoring persistent supply constraints and steady consumer demand across the automotive sector.
Data released by Cox Automotive shows that the Manheim Used Vehicle Value Index—widely regarded as a key measure of wholesale prices paid by dealers at auction—rose 6.2% year-on-year in March. The index has now reached its strongest level since mid-2023, signaling a continued upward trend in used car values.
The increase reflects a combination of seasonal and structural factors. Prices have been rising since the beginning of the year, supported in part by the annual tax refund season, which typically drives higher consumer spending. This year, refunds have played a particularly significant role, helping to unlock previously delayed purchases and boost retail activity beyond expectations during the first quarter.
Cox Automotive noted that the influx of tax refunds has “activated pent-up demand,” allowing wholesale prices to remain elevated for longer than traditional seasonal patterns would suggest. Jeremy Robb, the company’s chief economist, said that while auction prices usually peak toward the end of March, current market dynamics could extend that cycle.
Despite ongoing geopolitical tensions, including risks linked to instability in the Middle East, there has been little evidence so far of any meaningful slowdown in consumer demand. Analysts continue to monitor these factors closely, as shifts in sentiment could quickly influence purchasing behavior.
A critical driver behind higher prices remains the limited availability of used vehicles. Inventory levels fell below two million units at the end of March, marking the tightest supply on record, according to Cox Automotive. This shortage is particularly evident in high-demand segments such as three-year-old vehicles, where prices are now around 2% higher than a year ago and remain above typical seasonal norms.
At the same time, affordability challenges in the new car market are pushing more buyers toward used options. New vehicle sales have declined by roughly 5% so far this year, while used car sales have edged up by about 1%, highlighting a shift in consumer preference.
Supply constraints are being further exacerbated by a decline in trade-in volumes. With fewer consumers purchasing new vehicles, fewer used cars are entering the market through trade-ins, tightening inventory even more.
The lingering impact of pandemic-era production disruptions continues to weigh on supply. Industry estimates suggest that automakers produced approximately 8 million fewer vehicles than expected during 2021 and 2022, a deficit that still affects the availability of used cars today.
In pricing terms, the average listing price for a used vehicle reached $25,287 in February, up from $25,006 a year earlier. However, values remain below the peak of $27,603 recorded in 2022.
Taken together, constrained supply, resilient demand, and ongoing economic uncertainty are sustaining elevated price levels in the used car market. Analysts will be watching closely to determine whether these trends persist in the coming months or begin to ease as supply conditions gradually improve.
